11 April 2021
Coastal vs inland home prices, and other property trends in South Africa right now
Data analytics group Lightstone has published its latest data on South Africa’s property market, highlighting the state of the country’s housing market and the cost of buying a home.
The data shows that annual house price inflation was recorded at 4% at the end of February 2021, signifying yet another positive increase from the previous month.
“This optimism is evident at the provincial level and the different value bands with the exception of the low-value segment,” the group said.
“The low-value market has seen lesser demand due to the historically low-interest rate that has enabled both the immediate participation in higher-value market for new homeowners and a comfortable upgrade for low-value homeowners.”
Among major municipalities, the data shows that coastal municipalities are generally performing better than those inland.
This relationship further extends to all coastal and inland properties. Real estate agents from Pam Golding said that a trend in coastal buying is likely due to the lower interest rates which has made it easier for young South Africans to get on the property ladder.
The group added that it has also seen an increase in semigrating South Africans from other parts of the country.
“Our first-time buyers are Cape Town locals, including those relocating from the townships, as well as purchasers from the Eastern Cape, Gauteng and a few from Johannesburg,” said Emarie Campbell, Pam Golding Properties area principal on the Western Seaboard.
“They want affordable homes – preferably priced below R2 million and comprising freestanding, three-bedroom, two-bathroom residences with a lock-up garage providing direct access into the home and a garden for children and pets, and located close to MyCiTi bus stops, government and private schools, gyms, shopping malls, churches and hospitals.”
The table provides a long-term view of annual rates of inflation for various geographical areas.
Looking at the types of properties sold, the data shows that freehold properties are currently outpacing sectional-title properties, which are now below the annual inflation level.
In times of lower average prices in the sectional title residential property market, sales volumes traditionally soared upwards.
Conversely, when average prices rose, sales volumes almost always declined, says Rowan Alexander, director of estate agency Alexander Swart Properties.
In recent times, this pattern was apparent year after year. In 2016, for example, in Cape Town 4,620 sectional title (ST) sales were signed at an average price of R1,572,000 and, in 2018, 3,573 sales were put through at an average price of R1,795,000.
However, in 2020 this correlation between lower prices and higher sales suddenly no longer seemed valid: despite the average price then being only R1,420,000, only 3,008 ST sales were made.
The original article can be viewed here: