A new report on residential property prices in South Africa, published by Statistics South Africa (Stats SA) indicates that the annual national residential property price inflation stood at 1.6% in December 2023, a slight uptick from 1.5% in November 2023.
This translates to an average increase of 1.6% in property prices in December 2023 compared to the same period in 2022.
Furthermore, the Residential Property Price Index (RPPI) report by Stats SA, released on Thursday, pointed to a marginal 0.3% rise in property prices from November to December 2023.
The RPPI, a collaborative effort between Stats SA, the SA Reserve Bank (SARB), and with support from the International Monetary Fund (IMF), used data from property transactions recorded by the Deeds Office.
It's important to note that there typically exists a delay of around four months between a property transaction occurring and its recording, leading to the publication of RPPI data five months after the reference month.
A notable trend observed is the significant impact of the Western Cape on the 1.6% annual national inflation rate, with property prices in the province surging by 4.7% compared to the preceding year.
Residential property price index: national and provincial indices
Several factors could underlie the spike in property prices in the Western Cape. The region's allure for its lifestyle, scenic beauty, and economic prospects likely spurred heightened demand from both local and international buyers.
Additionally, limited land availability for development may have constrained housing supply, thereby pushing prices upward.
In metropolitan areas, including major cities like Cape Town, property prices saw an average increase of 1.2% from December 2022 to December 2023.
Within these urban centres, Cape Town recorded a particularly robust uptick of 3.8% in property prices over the same period.
Despite significant challenges faced by South Africa's property market in 2023, primarily attributed to high interest rates, those who managed to secure property purchases displayed a preference for Gauteng.
This province housed four of the top five suburbs based on transaction volumes, according to Lightstone's latest property market statistics for the year.
The report underscores the demanding conditions encountered by home buyers, owners, and estate agents throughout 2023.
Data revealed a substantial downturn, with approximately 240,888 property transfers totalling R257 billion recorded in 2023 — marking a stark 29% decrease from the 340,682 transfers valued at R345 billion in 2022.
This decline impacted both repeat and first-time buyers, with first-time buyers acquiring properties worth an estimated R75.5 billion and repeat buyers purchasing properties valued at R182.3 billion — reflecting a decrease of 28% and 24%, respectively, compared to 2022.
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