The Johannesburg real estate market has experienced a significant influx of capital since the May elections and the establishment of the Government of National Unity (GNU).
Chas Everitt reports that billions of rands have been invested in the Johannesburg real estate market since the beginning of 2024, particularly following the formation of the GNU in early June.
Rory O’Hagan, principal of the Chas Everitt Hyde Park and Sandton branch, noted that more than R800 million worth of home sales have been recorded in Johannesburg’s northern suburbs over the past seven months.
“We have noted increased property demand in our area, and actually right across Gauteng since the beginning of the year,” he added.
This data aligns with the latest Absa Homeowner Sentiment Index (HSI).
The index indicated that overall confidence in the Gauteng property market increased from 64% in the second quarter of 2023 to 72% in the same period this year.
The GNU’s influence O’Hagan argued that the GNU has boosted interest among both local and foreign investors, resulting in a significant upturn that has taken their office from a monthly average of R100 million in sales earlier in the year to over R150 million a month in June and July.
Business confidence also began to recover in June and July after a sharp decline leading up to the elections.
O’Hagan said that it is certainly a buyer’s market at the moment in Gauteng with an abundance of “stock”.
Over the last five years, the Covid-19 pandemic, semigration, load shedding woes, and infrastructure challenges have meant that Johannesburg’s market has lost ground to Cape Town.
Stats SA’s latest Residential Property Price Index (RPPI) showed the Western Cape prices rising by an average of 7.7% in the year ended March, while prices in Gauteng rose by a mere 0.7%.
Statistics SA figures showed that prices in Cape Town rose by 27.5% between 2019 and 2023, but that those in Johannesburg rose only 8.6%, said O’Hagan.
"In the Western Cape as a whole, prices rose 35.5% over the five year period, while those in Gauteng rose 16.4%, with the result that those who sell homes in Cape Town now can often upgrade substantially if they move to Johannesburg, and that those who own homes in Johannesburg now often decide against a move to the Cape when they realise how much more they would have to pay for an equivalent home,” said O’Hagan.
Lightstone meanwhile also noted that while Gauteng currently accounts for 35% of all residential sales in SA, these sales are only worth 37% of the total value.
The Western Cape, on the other hand, accounts for 30% of the total value of sales but only 18% of sales.
Most of the expat and foreign buyers coming into the SA market now are choosing Gauteng as their base, because it offers them the best employment and business prospects as well as much less expensive properties.
"Meanwhile, comparative value is playing a significant role in also attracting buyers back to Gauteng from the Western Cape in the process we call reverse semigration – and in a sharp reduction in semigration from Johannesburg and other inland areas to Cape Town and other coastal areas that became popular following the Covid-19 pandemic," said O’Hagan.
Indeed, the Absa HSI shows that confidence in the Gauteng market is currently higher than that in the Western Cape market for the first time in many years. What is more, many other South Africans are moving to Gauteng, he said.
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