Our very weak economy is not doing great things for the property market.
House prices have increased by only 3,5% in the last three months compared to the same period last year.
This, according to a report by FNB, who also note that some areas in South Africa are seeing much stronger growth than others.
More specifically, Durban is performing better than any other major metro in the country.
Here’s Business Insider:
Areas in the northern parts of Durban, closer to the airport, are doing particularly well. House prices in the North Coast Inland region, which includes areas such as Tongaat and Redcliffe, have increased by 41% over the past five years.
FNB says this has been supported by new developments in the area.
Sadly, for those wanting a second home on the KZN South Coast, you’re still forking out the big money.
Here’s how other areas in the country are doing:
Joburg
House price growth has been falling for 13 consecutive quarters.
Prices in Sandton are actually now 1.7% cheaper than a year ago. Randburg and Midrand saw weak house price growth of 0.4% and 2.0% respectively.
Soweto, on the other hand, is booming. Average house prices are up by almost 5%, and last year, prices jumped more than 14%.
Cape Town
House prices are seeing the slowest growth since 2009, and FNB doesn’t think things are going to improve any time soon.
I mean, for those who already own property in the Mother City, this doesn’t make for great reading:
Using data from the FNB’s Cape Town Sub-Regional House Price index, in the first quarter of 2019, price growth also turned negative in the City Bowl, Southern Suburbs, and Eastern Suburbs (areas like Salt River and Woodstock).
Pretoria:
House prices in the first quarter were only 1,5% stronger than a year ago, with pricey areas losing value.
Prices in Pretoria East and Centurion fell by 0.01% and 0.8% respectively. In contrast, the northern suburbs, primarily comprised of middle and low-income areas, are trending upwards, says FNB.
Akasia, which primarily offers middle-priced housing alternatives, jumped by almost 7%, while Mabopane/Soshanguve saw growth of almost 10%.
All of this shows that house prices in less expensive areas are doing much better than pricier properties.
House prices in the low-income band (with an average purchase price of R395 900) jumped by an average 16.3% in the past year, while the lower-middle segment (average purchase price R638 200) averaged 6.8%.
The middle segment, which corresponds to homes in the middle 20% of the price spectrum (average purchase price R935 000), registered 4.2%.
On the higher end, upper-income (average purchase price R1.3 million) and luxury value (average purchase price R2.3 million) saw growth of 3.0% and 0.8% respectively.
There also appears to be a “moderate oversupply” in middle to upper-income areas, due to new developments like complexes and sectional title properties.
Rough times.
[source:businessinsider]
