SA’s national house price inflation at 4.35% as entry-level outpaces luxury property market

House price inflation has remained steady across most of South Africa, with noted decreases in the Free State and KwaZulu-Natal.

This is according to the latest residential property industry data released by Lightstone, which shows that the National year-on-year house price inflation is at 4.35%, ” marking a 4th consecutive month of a 5%-or-under growth in prices”.

(Source: Lightstone)

“Inflation remained steady in the Eastern Cape, Gauteng, Limpopo and Mpumalanga; increased in the North West, Northern Cape and Western Cape; and decreased in the Free State and KwaZulu-Natal.

“Prices in the Low Value segment continue to outgrow those in the higher-value segments. The inflation rate for this segment is currently at 9%, almost double that of the Mid Value segment at 4.9%”

“Despite indications that interest rates are on a slow, but steady, upward trajectory, fierce competition between banks for market share ensures a favourable lending environment which, coupled with an ongoing strong demand for homes among first-time and repeat buyers alike, is expected to provide South Africa’s housing market with a solid underpinning during the year ahead,” says Dr Andrew Golding, chief executive of the Pam Golding Property group.

Also, according to the Pam Golding Residential Property Index, nationally, the lower price band below R1 million, continued to register uninterrupted growth in 2021. However, the R1 million to R2 million price band registered the strongest growth during the year as a whole (see below).

(Source: Lightstone)

According to the Pam Golding Residential Property Index, national house price inflation (HPI) averaged at 5.1% last year, compared to 3.7% in 2020 and 2.6% in 2019. The Western Cape region recorded the strongest growth in prices in 2021, at +6.2%, followed by KwaZulu-Natal at +5.3% and Gauteng +4.5%.

Pam Golding research also shows that “while the Covid-boost in growth in freehold prices has also ended, with price growth rapidly losing momentum, freehold price growth averaged +6.2% in 2021 versus +3.0% for sectional titles.

“The coastal (within 5km of the coastline) price premium continues to widen, reaching +1.3% in September 2021 (latest data) and averaging at +1% for the year to date, compared to just +0.04% in 2020.”