The first thing that the figures make obvious is that the South African property market has not crashed
on stream to meet demand. s Banks were lending up to 105% and aggressively competing for business. s Statistics revealed that, for the first time, single women were the biggest group of property buyers in South Africa – ahead of couples and single men.
2018
Average residential property price: R1 134 693
Average house price growth: 3.5%
OVERVIEW: The start of the year saw an improvement in consumer confidence and a subsequent boost in market performance but this was short-lived. Public policy lacked direction and controversial issues, such as the prospect of land expropriation, gave investors and homeowners the jitters. Homes took longer to sell. Price growth in Cape Town continued to slow, or normalise, as economists say.
TRENDS:
s Land reform processes saw jitters among many homeowners following President Cyril Ramaphosa’s State of the Nation address. s Retirement development accelerated. s The VAT increase and fuel hikes impacted on household affordability levels. s People looked for smaller properties closer to their workplaces and other conveniences in order to reduce living costs.
2017
Average residential property price: R1 096 322
Average house price growth: 3.8%
OVERVIEW: This year was said to be a buyer’s market as house price growth remained just over 4% from January to December. This was the year the drought in Cape Town coincided with a slowdown in house price growth. Traffic congestion and petrol prices saw more buyers looking for properties close to their workplaces. The year was volatile on the political, social and economic fronts, with junk status downgrades hitting the property market hard. TRENDS: s Activity in the below R1m price band remained high. s First-time buyer numbers remained low in Cape Town but high in Gauteng. s Micro-apartments made their debut in Cape Town. s Estates were still a major drawcard for buyers.
2016
Average residential property price: R1 056 556
Average house price growth: 4.9%
OVERVIEW: The country’s property market remained resilient in the face of a tough economy and financial market volatility. The rand weakened and Consumer Price Inflation was above the Reserve Bank’s target limit of 6%, leading to a drop in consumer confidence. Properties in good locations, such as those close to hubs and good schools, remained popular with buyers and often performed better than average national trends revealed. TRENDS: s The Western Cape continued to outperform the rest of the country as house price inflation continued to rise. s The sectional title sector’s performance remained superior to full title.
Semigration to Cape Town gained momentum and house price inflation continued upwards, out of sync with the rest of the country. s First-time buyers made up the majority of home loan applications. s Most buyers wanted townhouses and apartments. s More disruptors entered the market with new technological and financial models.
2015
Average residential property price: R1 077 055
Average house price growth: 6.1%
OVERVIEW: Technology continued to change the real estate sector for buyers, sellers and agents. Transaction volumes saw slight increases from the start of the year, and better economic growth positively impacted the market, although household finances were still under pressure.
TRENDS: s Virtual reality goggles were introduced in the global property market. s House price growth started to decelerate. s Many property investors looked to invest offshore. s Retirement property development remained a focus for developers. s Student accommodation promised good investment prospects. s Young professionals made their mark, looking for estate homes and apartments in new developments. s Urbanisation and semigration trends were major hallmarks of this year’s property trends.
2014
Average residential property price: R948 760
Average house price growth: 6.8%
OVERVIEW: The market was generally buoyant, especially activity related to first-time buyers and those entering the middle market sector. Most home loans granted were for less than R1m. Property prices in Cape Town soared by more than 50% in some areas, especially those with easy access to the city centre. Property prices in Gauteng also increased, although nowhere near the levels of the Mother City.
TRENDS: s Rental inflation rose. s Township property development started to rise. s Homeowners were encouraged to reconsider their high-walled perimeters, which were reported to be aiding crime. s Properties valued at R1m-and-under saw acceleration in their value. s The trend towards smaller homes grew as urban land scarcity put pressure on property values.
2013
Average residential property price: R888 160
Average house price growth: 5.9%
OVERVIEW: Continued low-interest rates assisted a property market still plagued by slow house price growth. Affordability and over-indebtedness were still problems for South African households. Homes remained on the market for longer. Socio-economic issues, including ongoing violent strike action, rand weakness and high inflation rates, impacted the market heavily.
The property market this year was predicted to peak in 2018.
TRENDS:
s The appeal of security estates continued to grow. s The buy-to-let market weakened. s Property economist Erwin Rode said purchasers, unless buying property with cash, should rather rent. s Despite woes, consumer confidence improved. s The sectional title market saw increased activity. s Some areas saw improvement in the luxury segment. s International buyers started to re-enter the market. s Technology started to make a bigger impact on the property market. s Green trends became a hotter topic.
2012
Average residential property price: R838791
Average house price growth: 6.2%
OVERVIEW: Property buying trends reflected the macro-economic situation and declining affordability levels of households, much of this due to the running costs associated with property. Wage increases were also smaller. Desperate sellers flooded the market, offering properties at knock-down prices. Average house prices continued to increase. Home loan approval rates also increased, with some figures putting this rise at almost 50% year-on-year. TRENDS: : s Affordable housing continued to outperform other property segments. s There was an oversupply in the sectional title market, making full title homes more popular. s Political instability and talk of land reform affected foreign property investment. s Home security measures remained good selling points. s The number of residential building-plan approvals was higher than the previous year. s Residential construction picked up. s The state channelled money into low-income housing and upgrading informal settlements.
2011
Average residential property price: R789 837
Average house price growth: 2.7%
OVERVIEW: Although the property market was still considered to be suffering the effects of the recession, signs of improvement were evident, giving buyers just a small window of opportunity before prices were expected to rise again. Some buyers held back, thinking prices would decline. The introduction of the Consumer Protection Act made it more difficult for banks to approve large home loans.
TRENDS: s The number of black home buyers continued to increase, exceeding the number of white buyers. s Sellers were forced to drop asking prices as homes stayed on the market longer. s Retirement property development started to gain momentum. s Eco-estates gained popularity. s Many sellers turned to auctions to achieve better sale prices but some held on to properties, waiting for the market to improve.
SCHALK VAN DER MERWE, FRANCHISEE FOR THE RAWSON PROPERTIES HELDERBERG GROUP
s Average house prices are based on FNB house price growth data