Whatshot
Property Talk
Property Talk
Date: 2017-01-27
The provincial house price growth rates show the Western Cape currently at 8%, which does not sound like much but when compared to the -2,9% decline in the Eastern Cape, or the 1% of KZN and 1,2% of Gauteng it suddenly appears outstanding. The 10-year high for the Western Cape home price growth is reported to have been reached in the 1st quarter of 2016 and since then has seen three quarters of decline. The net inward migration into the Western Cape has been the driving force of their relative regional growth performance. However house price growth is a double-edged sword as affordability issues become pronounced as prices race ahead. The percentage of first time buyers is estimated to be only 10% in Cape Town, which is the lowest of all the major metros.
Tshwane has the highest first time buyer activity at an estimated 28%, Joburg at 22% and the eThekwini metro at 17%. KwaDukuza can be expected to be similar to eThekwini. This is a clear indication that higher home prices inhibit first time buyer activity. The average estimated house price in the Western Cape is reported as R1,411 million and significantly higher than the next most expensive region being Gauteng at R1,042 million. For estate agents operating in the greater Ballito market these averages often appear very low as our home pricing structure is significantly higher than national or regional averages. Zimbali's entry level of home ownership is R4m and the top end is north of R60m. There is a large price margin opening up between older homes and newly built homes. I recently concluded a lease at R100,000 per month which begins to redefine how people view the rental market.
So what happened in the fourth quarter of 2016 in terms of house price growth FNB's figures across the major metros suggest eThekwini, I am sad to say, was the worst performer with a -2,9% decline in house prices. PE's Nelson Mandela Bay metro also experienced a decline to the tune of -0,5%. Unsurprisingly the star performer was the Cape Metro with growth of 8,1%. On the flip side we should hopefully see good relative first time buyer figures.
Driving through the Karoo and Free State recently, it is evident the drought has been broken but it did take a toll on parts of the country and together with a weak manufacturing sector, KZN, the Eastern Cape and Free State have come through a relatively tough time. Time now to focus on the future and a better 2017.
For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.