Property prices ‘accelerate in all provinces’

HOUSE price growth continues to accelerate in all provinces, with Mpumalanga, North West and the Eastern Cape standing out as the top performers, because of the positive impact of low interest rates, according to bond origination group BetterBond.

“After a year of record-low interest rates, buyers continue to make the most of the favourable lending environment.

“Initially, BetterBond experienced a significant uptick in first-home buyers, buoyed by the improved affordability. But what we are observing is that buyers across all price bands are seeing the value of buying a home now while the prime lending rate is at the lowest it has been in 55 years,” BetterBond chief executive Carl Coetzee said yesterday.

According to Lightstone data to the end of May, the top-performing province was Mpumalanga, with house price growth of 8.1 percent, followed closely by the North West.

In the first quarter of last year, house price growth in North West was 0.7 percent. By February this year, it was a substantial 8 percent.

Similarly, the Eastern Cape had shown strong price growth of 7.4 percent. Nelson Mandela Bay was the top-performing metro at the end of February, with house price inflation of 8 percent, according to Lightstone.

House prices were well up from pre-pandemic levels, said Coetzee.

Coetzee said Lightstone’s data for May showed that house price inflation has improved significantly for all provinces, except the Western Cape, compared with the first quarter last year. The Western Cape’s price inflation, at 4.1 percent, was still below the 4.4 percent it was in January last year, and considerably less than the 9.7 percent in 2017.

“However, house prices in the Western Cape have traditionally been substantially higher than the rest of the country, and this dip in inflation reflects the necessary price correction that was already under way before the pandemic,” said Coetzee. There were also fewer overseas buyers, because of travel restrictions.

However, the percentage of bond applications in the Western Cape for properties of more than R3 million had increased from just more than 5 percent in June last year to almost 11 percent for the year to date, said Coetzee.

Similarly, the percentage of mortgage bond applications for properties priced at more than R3m in Johannesburg North West was at almost 8 percent for the year to date, up from 5 percent in June last year.