Residential Property Price Growth Rate - Tale of 2 Cities - Johannesburg and Cape Town

Municipal Disparity in Residential Property Price Growth

The latest Lightstone Residential Property Indices Report highlights the significant disparities in residential property price growth rates among South Africa's major metropolitan municipalities.

Johannesburg has entered negative territory, experiencing a price decline of roughly -1%. Meanwhile, Tshwane exhibits modest inflation of around 1%, and Ekurhuleni sits slightly below 2%. Both Ethekwini and Nelson Mandela Bay, coastal metropolises, are witnessing stagnant residential property price growth at approximately 0%.

Cape Town stands out with a price growth rate of about 4%. This robust performance suggests a well-managed city attracting investors despite the national economic slowdown. Notably, Cape Town's growth aligns with the 4.9% post-COVID-19 increase observed in 2021. Further confirmation of this trend comes from FNB's latest Residential Property Barometer, indicating a rise in relocation-driven sales in the region, from 11% in Q4 2023 to 13% in Q1 2024.

The concerning trend of declining residential market prices in Gauteng becomes evident when examining Johannesburg's continuous price drops over the past three years (as detailed in the table below). Following a brief post-pandemic upswing of 3.2% in 2020, Johannesburg's residential property prices have consistently fallen: 2.3% (2021), 0% (2022), and throughout 2023 (0.4% in Q1, 0.7% in Q2, 0.9% in Q3, and -1% in Q4).

National annual property inflation rate is 2.29% and monthly is 0.19%

The latest Lightstone Residential Property Indices Report shows the national annual property inflation rate stands at 2.29% and the monthly rate is 0.19%.

On a provincial level, annual property inflation remained unchanged in the Eastern Cape, Gauteng, and KwaZulu-Natal since Q3 2023. However, it increased in the Northern Cape while decreasing in the Free State, Limpopo, North West, Western Cape, and Mpumalanga.

Annual property inflation for Low-Value properties increased by 9.0%, while High-Value properties decreased by 1.6% compared to the previous month. Mid-Value properties decreased to 1.4%, while Luxury properties experienced higher inflation at 2.8%.

Provincial Property Inflation Status

All South African provinces are currently experiencing property price increases that are lower than the national inflation rate.

Only the Western Cape (4.9%) and Limpopo (4.01%) provinces exceeded residential price growth of more than 4%. Price inflation growth is the lowest of all provinces in Gauteng at 0.42%, while KwaZulu-Natal is the second lowest at 1.39%.

The other 5 provinces are at: Mpumalanga (3.99%), Northern Cape (2.92%), Eastern Cape (2.77%), North West (2.63%), Free State (2.28%).