South African Property Market - 2021 Snapshot Report

National Property Market

South Africa's residential property market rebounded in 2021 with property transfers totalling 318 152 - up by 21% from a CV-19 restricted 2020 when 262 104 property transfers registered during the year. The total value of transfers in 2021 reached an all-time high of R326 billion.

The average monthly registrations in 2021 was about 26 513 and 872 per day.

The average registrations of 2020 and 2021 however still represent a decline from pre-CV-19's 2019 (308 818), which itself, was significantly down on 2016 (339 218), 2017 (329 381) and 2018 (326 035).

Until the macro environment improves, it is according to Hayley Ivins-Downes, Head of Digital at Lightstone, unlikely that the property market will too, although there have been pockets of resilience and growth in certain geographical areas and price bands.

Top 3 Provincial Property Markets

Gauteng remained the province with the most property activity (129 960 transactions in 2021), just short of the 131 226 in 2018 but still 6,3% less than the 138 683 registrations of 2016.

The Western Cape was in 2021 the next highest with 76 941 transfers registered last year, up 41% on the 54 400 transfers recorded during 2020 and, the best year since 2016 (78 158). In fact, 2021 reversed four years of decline and a combination of low interest rates, better run municipalities, and work-from-home / semi-gration to a better lifestyle would more than likely account for this change.

Property transfers were also up in KwaZulu-Natal in 2021 but remained just below 2018 levels.

Registration Growth in all price segments - except 'low value market' (priced below R250 000)

According to Ivins-Downes, despite the residential property trend being negative, there are pockets where recoveries have been stronger, and performance has been good.

Unfortunately, this was not the case for the 'low value' market (properties priced lower than R250 000) which had declined significantly in recent years. In 2021, 53 384 property transfers were registered as compared to a six-year high of 82 985 in 2016. In e.g. the Cape Town region the reason for this decline is purely based on the lack of properties available in this price range - as capital growth has during the last few years dramatically downsized this market segment.

The 'mid-level' market (properties priced between R250 000 & R750 000), however, recovered to 117 159 registrations - just above 2016 levels (115 210).

The 'high level' market (R700 000 to R1,5 million) performed positively - increasing from 79 551 (2020) to 102 462 (2021) while the 'luxury market' (R1,5 million to R3 million) are at a six-year high, surpassed 2016 levels (38 032) - growing from 29 231 (2020) to 38 086 registrations in 2021.

The 'super luxury market' (R3mil and above) also performed better than any year since 2016 (7 412 registrations) - increasing by 37% on the 2020 registrations (5 162) to 7 061 registrations. The data confirms that the middle class and wealthier homeowners who are better weathering the economic storms.

The biggest volume of registrations in the South African property market is in the segment priced below R1,5 million - where 273 005 registrations makes out 85,8% of all registrations in SA.

The luxury price segments consists only of 12% (between R1,5mil and R3 mil) and 2,2% (more than R3mil) of all registrations.

Looking Ahead in 2022

Looking ahead, the 2022 numbers are encouraging. In January, 12 494 transfers took place, the highest in that month since 2019, and the 16 696 transfers recorded in February were higher than 2019 and 2020, but short of 2021. Overall, the 29 190 in the first two months of 2022 compares favourably with the 30 706 in 2021 and ahead of 2020 (27 020) and 2019 (25 068).