With a mix of factors affecting the property market, from political instability and a weak rand, to slow economic growth, a rise in interest rates, and the inevitable decrease in disposable income, South Africa’s property market is experiencing a decline in house prices. But recent data has revealed that the Western Cape continues to be resilient, with the fastest house price growth and highest asking prices in the country.
For many first time home buyers, saving up the capital to enter the property market is difficult, but a sound investment to make in South Africa regardless. FNB’s House Price Index, which reveals recent data based on housing prices across the country, shows the current average house prices buyers can expect to pay. Written in collaboration with Private Property, these are some of the insights:
The Western Cape had an average house price of R1.4 million in the second quarter of 2017. This is unsurprising as it is the tourist capital of the country, with a high economic growth rate and a lifestyle attractive to investors. Those looking to buy in the Western Cape will have to be prepared to fork out more money for property if they’d like the lifestyle the province can offer.
Despite being the most expensive city to buy property in, house price growth in Cape Town has slowed in recent years, from 6.9% in the first quarter of 2017, to 5.7% in the second quarter of 2017. One reason could be the high house prices combined with the decreasing ability for potential buyers to afford these prices, as disposable incomes shrink.
Gauteng reveals an average asking price of R1.04 million, just below the Western Cape. Since 2010, Gauteng’s average asking price has increased by 41.2%. According to John Loos, household and property sector strategist at FNB, Gauteng is more affordable for buyers due to its lower asking prices but higher incomes per household.
Kwazulu-Natal comes in third with an average asking price of R1.02 million and an average price growth of 46.4% between 2010 and 2017. KZN continues to keep up its popularity and therefore higher prices due to its location on the eastern coastline, with beachfront apartments that are in high demand.
The Eastern Cape trails behind at fourth with an average asking price of R826,479. With economic activity, growth and development lagging behind the other major provinces, the Eastern Cape is unable to attract investment. That being said, the province is currently developing infrastructure and property to increase economic activity, employment and hopefully the province’s GDP. Due to these developments, the province’s house price has increased by 5.4% within the first half of this year.
For those searching for property via online platforms such as Private Property, Gauteng is your best bet in terms of overall affordability. But, if you’re looking for the coastal lifestyle, and are able to pay more, the Western Cape is your top choice.