The housing market is showing steady momentum in SA, with both prices and sales activity improving across the country.
The recovery that initially began in the Western Cape is now spreading to Gauteng’s two major metropolitan areas, signalling a wider market rebound and a more optimistic outlook for the housing sector. According to the latest Stats SA residential property index, the Johannesburg metro’s house price inflation returned to 0.7% growth in August, for the first time since early 2023, while Tshwane prices were up 1%.
Research economist at Ooba Home Loans Sandra Gordon said property inflation was evident in the 2024 fourth quarter FNB Estate Agent Survey. The survey showed a surge in market activity in both Gauteng and the Western Cape, with Gauteng seeing the most notable improvement.
“After a long period of underperformance which, in the case of Johannesburg, included a period during which prices declined from year-earlier levels, many properties in Gauteng are now relatively affordable and competitively priced,” Gordon said.
The Western Cape drove the market rebound, contributing 2.3 percentage points to national house price inflation of 3.3% in August 2024. Cape Town-led metropolitan areas contributed 1.8 percentage points to the annual inflation rate of 2.4%.
The recovery has spread to most regions, with Ekurhuleni (-1.2%) and Nelson Mandela Bay (-1.5%) being the only metro areas still experiencing a drop in prices by August.
Gordon told Business Day the combination of some more affordable properties, easing financial pressure on households, and modest interest rate relief has made homes accessible to a wider range of buyers, driving a significant boost in sales activity.
The rise in home prices in Johannesburg comes after years of stagnation dating as far back as 2010, with the market having been held back by declining demand due to worsening infrastructure, rising crime and high unemployment.
Standard Bank head of home services Toni Anderson attributes the improved market performance to the interest rate cuts in the last quarter of 2024, which appear to have triggered the start of a recovery in residential property activity.
“There has been a substantial jump in home loan applications overall between the third and fourth quarters of last year, seemingly showing some positive sentiment from buyers and thereby pushing some improvement in the property market. What is visible in Johannesburg is the improving confidence in the economy, along with a positive outlook on interest rates [from a lending perspective],” Anderson said.
She said the lower rates also led to a boost in confidence by sellers as the number of offers by buyers rose.
Anderson said the Gauteng housing market had also been affected by semigration, as many predominantly older, more affluent homeowners sold and relocated to the Western Cape.
“However, not everyone can — or wants — to leave Gauteng due for example to family, work or other commitments — so the semigration trend has limits and indeed appears to be losing momentum. This is easing up pressure on the Gauteng market,” she said.
Gauteng’s status as the economic hub of SA continues to drive demand, offering numerous job opportunities that help retain its appeal, especially for young professionals.
“In the case of Gauteng south and east, Ooba data shows that this area remains affordable — with an average purchase price last year of R1.2m compared to the national average of R1.6m. As a result of the relative affordability, 52.3% of applications received by Ooba last year were from first-time home buyers. This compares to 45.8% nationally and just 35.8% in the Western Cape,” Gordon said.
Update: January 15 2025
This story has been updated with new information.
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