Sales in SA’s major metro markets show marked increase | Everything Property
HomeFront

Sales in SA’s major metro markets show marked increase

major metro

Though unit sales in SA’s national housing market are slowing, sales in the five major metros have increased noticeably in the post-pandemic period, says Dr Andrew Golding, chief executive of the Pam Golding Property group

WORDS: Dr Andrew Golding :: PHOTOS: Freepik AND UNSPLASH

Though unit sales in SA’s national housing market are slowing, sales in the five major metros have increased noticeably in the post-pandemic period, says Dr Andrew Golding, chief executive of the Pam Golding Property group

If one were to ignore the 2021 rebound – or split those sales equally between the severely Covid­­­­—impacted year of 2020, and 2021­­­­—sales last year (2022) were the highest recorded during the past decade. According to Lightstone statistics and combining both freehold and sectional title sales in Cape Town, Tshwane, Johannesburg, Durban and Gqeberha, a total of 46,497 homes were sold in 2022. This is below the 48,438 recorded in 2021, a level which reflected the rebound from the pandemic-induced slump in 2020.

Looking at total sales in the five major metro housing markets, Tshwane accounts for just over a third of all sales at 33.6%, followed by Cape Town at 24%. Johannesburg, SA’s largest city and economic hub, accounted for just 20.2% of all sales in the five major metro housing markets. Durban came in at 12.2% and Gqeberha at 10%.

major metro

Over the past 10 years Gqeberha and Tshwane have gained the most market share of the total national units sold. Cape Town, surprisingly, was largely unchanged, but the trend towards semigration to numerous areas and towns across the Western Cape perhaps accounts for this.

Though the statistics for the Durban Metro may seem lower than anticipated, they should be viewed against the backdrop of a residential property market in KwaZulu-Natal which has spread further out along the burgeoning North Coast, as well as along the South Coast. 

SHIFT TO SECTIONAL TITLE

Although there has been a slow but steady shift from freehold to sectional title sales at a national level, within the metro markets there has been a clearer shift – presumably because land, and therefore homes, are more expensive within metro areas due to a shortage of available land. In 2013, 44.6% of all sales in the five major metro housing markets were sectional title. While the Covid lockdowns and work-from-home trend resulted in an increased demand among some for more spacious freehold properties in 2020 and 2021, by 2022 sectional title sales in these metros had risen to nearly 52% of total sales.

As is often the case in housing markets, trends differ significantly between metro markets. From 2013 to 2022, Gqeberha experienced the largest shift towards sectional title properties of +11.3%, followed by Johannesburg and Tshwane at +7.3% and +7.1% respectively, then Cape Town at +5.6% and Durban at +4.5%. Some of the growth in sectional title sales could be attributable to increased demand from first-time home buyers following the aggressive interest rate cuts during the pandemic, which made buying a home more affordable to young adults who might previously have rented accommodation. 

AGE PROFILE

Of interest is that the age profile of so-called “stable” owners – who have owned their properties for at least 12 months – seems consistent across all five metro markets, with the exception that Cape Town has a higher-than-average percentage of retirees (32%) while Johannesburg has a lower-than-average share of retirees at 23%. Tshwane is slightly higher at 24% while Durban and Gqeberha both have 29%.

As a result of its larger retiree population, Cape Town has fewer middle-aged, stable owners at 26% compared to 34% in Johannesburg, perhaps attributable to the fact that a large working population favours the country’s economic hub. The age profile of recent buyers (February 2022 – January 2023) shows a large degree of similarity across the metro housing markets, except that Cape Town once again attracts a slightly older buyer, while Johannesburg has the largest percentage of middle-aged and young adult buyers.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top

Pin It on Pinterest