House prices steady as we head to local elections

Mid-year data from the Deeds Office indicate that while slowing marginally, house prices remain steady with growth of around 5% year-on-year, still the highest in five years, as we get ready for the local government elections.

Regionally, the Eastern Cape achieves 8.5% while the Northern Cape is achieving around 5.5%. The inland provinces are showing some of the highest growth with the Free State and North-West at 6.7% respectively, Mpumalanga at 6.5% and Limpopo 6.2%.

In terms of the large economic provinces, KwaZulu-Natal tops the growth with 5.7% followed by the Western Cape at 5.4% and Gauteng at 5.2%.

From a metro perspective, Port Elizabeth remains well ahead with 8.6% year-on-year growth followed by the East Rand (6.8%), Pretoria and Durban (both at 4.5%), Johannesburg (4.4%) and Cape Town (3.4%), continuing its poor performance.

Freehold property continues to achieve higher growth

Lightstone data shows that freehold property continues to outperform sectional titles with growth of 6%, the highest level since 2015. This being driven primarily by the pandemic-induced desire for more space and better surroundings.

In contrast, sectional title property overall is currently underperforming with growth of just 3%, well below the national average and the highs of 2015.

Low to mid-market price bands achieving the best price growth

The lower price bands up to R1,5 million continue achieving the best growth at 4% to 6% with properties below R250 000 booming with growth of 11%. This is largely due to the low interest rate and favourable mortgage lending climate which has boosted first-time property buying, but also a level of buying up for many.

Properties above R1,5 million is achieving growth of under 5% and the higher up the price ladder, the lower the growth. It is widely reported that properties above R5 million are seeing low to no growth despite the higher activity in many areas.

Luxury property markets very active, but prices remain under pressure

While the low to mid-market areas continue to thrive, Seeff’s luxury areas are also reporting sustained activity. Seeff has also achieved good sales in the super luxury, R20 million-plus sector including R40 million and R36 million in Fresnaye, several sales in Camps Bay ranging to R32,38 million, sales of around R20 million in Constantia Upper, sales of up to R55 million in Plettenberg Bay, up to R24,5m in Zimbali and the sale of a penthouse in Umhlanga at R27,5 million.

Ross Levin, licensee for Seeff Atlantic Seaboard and City Bowl says that while the market below R10m has been active since mid-2020, this year has seen an uptick in sales, especially houses in the R12m to R20m-plus range as well. There is more demand from foreign buyers as well as a steady flow of semigration buyers, predominantly from the Johannesburg area, but also from other provinces including KZN.

He says a lot of the historic stock has now been absorbed by the market and new sellers need to make sure they are correctly pricing their properties, but equally, buyers need to not treat every seller as overpriced or desperate.

According to Gerhard van der Linde, managing director for Pretoria East, the highest sales by Seeff include R11 million in the Mooikloof Equestrian Estate, R9,5 million in Waterkloof Ridge and R7,8 million in Woodhill Golf Estate

The busiest price band for freehold property is in the R2 million to R5 million range and for sectional schemes between R1 million and R1,3 million. Many are selling due to semigrating to the Cape or retiring.

Tiaan Pretorius, manager for Seeff Centurion says there is currently an extremely healthy demand for almost any price range in the area including townhouses between R650 000 and R1 million, freestanding homes between R1,5 million and R2,5 million and estate homes between R1.8 million and R2.5 million. 

He says further that prices are climbing due to the healthy demand and increases are expected to be above inflation. Currently, the average price difference between asking and selling prices is about 8%, meaning that sellers in general are looking at offers of 8% below asking price. Seeff Sole Mandates though achiever a higher price of within 3,6% of the asking prices on average.