The boost in confidence and political stability after the establishment of the government of national unity (GNU) earlier this year may be the shot in the arm needed to revitalise the residential property market, which has been experiencing sluggish growth.
This is according to Hayley Ivins Downes, the head of digital at Lightstone — a provider of detailed data on property, automotive and business assets. She said that the percentage of negative sales — where properties are sold for less than their purchase price — had dropped from last year’s second half.
“Volumes and value were both marginally down in the first half of 2024 (103,000 properties, R139.5bn) compared to the same period last year (104,500 properties, R144bn), both of which were down on the second half of the year in 2023 (106,000 properties, R146bn). The number of bonded sales and the percentage of bonded sales were also down,” Ivins Downes said.
The recent interest rate cut could be a boon for the sector in the long term as the market is set for a slow recovery, Landsdowne founder and CEO Jonathan Kohler said.
During the past year, activity in the property market stalled as consumers remained under financial pressure on all fronts, he said.
According to FNB’s latest property barometer, the FNB housing price index has averaged an increase of 0.8% year-to-date, a decline from 1.8% in 2023 and 4.7% in 2022 for the same period. This trend highlights how reduced disposable incomes and increased borrowing costs have negatively affected demand and, in turn, house prices.
Ivins Downes pointed out that while the increase was marginal, the first-time buyer numbers were up on the 2023 first half and 2023 second half of the year numbers. Though the variance is barely noticeable, it suggested a stability in the market over 18 months.
The property market’s performance came against a backdrop of a small increase in both the volume and value of residential stock available, she said.
“In August 2024, there were 7,050,000 properties registered at the deeds office, representing a marginal increase from the previous year. The total value of SA’s residential property market reached R7-trillion in August 2024, up slightly from R6.8-trillion in August 2023.”
“Other than under R250k price band, the market in the first six months of 2024 underperformed relative to the last six months of 2023, and in most cases, the first six months of 2023,” Ivins Downes said.
Sectional scheme sales volumes were marginally up in the first six months of 2024 (33,000) compared with the corresponding period in 2023 (32,000). Freehold sales volumes were slightly down (54,000) in the first six months of 2024 compared with the same period in 2023 (55,000). Similarly, estate sales also fell to just under 16,000 in 2024 from just over 17,000 in 2023, she said.
Despite the overall flat market, the Western Cape continued to outperform other provinces in attracting homeowners, but Gauteng remained SA’s largest province in both sales volume and value of transactions over the past three six-month periods.
Growth in demand
Gauteng is now experiencing growth in demand for residential properties, especially in the Tshwane region, as home buyers prioritise value for money in their investment choices, according to home loan originator Ooba’s CEO Gavin Lomberg.
During the peak of the Covid-19 pandemic many prospective homebuyers departed from economic hubs in search of coastal properties and lifestyle improvements. However, recent data shows encouraging signs of recovery in Gauteng’s residential real estate market.
“There are strong signs pointing to the ongoing recovery of Gauteng’s property market, particularly in Tshwane, which has registered notable improvements in the average purchase price, first-time homebuyer demand and the investment property category,” Lomberg said.
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