Residential property stock registered at the Deeds Office has more than doubled in South Africa’s first 30 years of democracy, rising from 2.7m units in 1994 to 7.2m this year- this is according to Lightstone.
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Hayley Ivins-Downes, Managing Executive Real Estate at Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets, said data from the Deeds Office indicated that much of the new residential stock added between 1994 and 1998 was RDP/subsidised housing.
Hundreds of thousands of units were added between 1994 and 1999 in a boom period for housing development in South Africa. Ivins-Downes said the low development mark was 334 000 units in 1994 with a high of nearly 447 000 in 1998.
But the momentum dropped after 1999, and a second phase between 1999 and 2005 recorded a high of nearly 209 000 in 2003 and a low of 165 000 the following year. “In 2007 new residential stock numbers dropped to 112 000 before reaching a 30-year low of just under 55 000 in 2020. In this third phase, new residential stock has not risen above 87 000 units”, she said.
Ivins-Downes said while the overall stock count had risen, sales volumes had been plateauing in recent years and in 2023 drifted close to 208 000, not much higher than 1994’s 190 000.
“The property market reached a high point in 2006 and 2007, with more than 320 000 sales recorded in both years, before falling in 2008 to 231 000 and then dropping to just under 155 000 as the 2007/8 global financial markets crash took their toll”, she said.
The market recovered to nearly 238 000 sales in 2016 before drifting downwards to 197 000 in 2020 as Covid took its toll. A strong reaction in 2021 and 2022 gave way in 2023, when just more than 207 000 sales were recorded – not much higher than 190 000 in 1994.
Nominal sales prices had, however, rose steadily from just under R150 000 in 1994 to R1.4m in 2023.
Changing face of the market
Freehold remained the dominant property type, but Ivins-Downes said the market was changing with Sectional Schemes and both Freehold and Sectional Schemes within Estates becoming increasingly popular.
Ivins-Downes said data of new stock added per property type demonstrated “how the shift was gathering momentum in favour of Estates and Sectional Schemes”.
The age of buyers and tenure of occupation had changed. “We can see how the financial markets crash of 2007/8 impacted behaviour as buyers have got older and tenure has been extended.
Value bands
“When we look at the value bands (using the property’s current calculated value to categorise it in value bands), we can see how the mix of value in stock changed over the years”, Ivins-Downes said.
The proportion of houses valued at less than R500 000 grew from 1994 to around 2005, and it has remained reasonably constant since then. Conversely, houses in the R750 000 to R1.5m band had fallen as a percentage of the total.
The step change in the 1990s was most likely the result of RDP/BNG/subsidy housing coming onto the market, and Ivins-Downes said if properties under R500 000 were stripped out, the balance of value band development alters.
