Housing in Southern Africa May 2016

Housing

Affordable hous

According to the Pam Golding Residential Property Index, house price inflation in the lower-price segment of under R1 million has been outperforming all other price categories since early-2015.

T his has continued into 2016, with an increase in prices in this category of 9,4%. During 2015, this category recorded an increase of 7% – compared to the national average of 5,8%. However, within the affordable sector – defined by Lightstone as homes valued at under R250 000 – house prices have risen by a stagger- ing 28,5% during the first 10 months of 2015. AndrewGolding, Chief Executive of Pam Golding Properties group, says there is robust growth in former town- ships. The group’s quarterly property index reports house price inflation in these areas rose by 10,7% in the third quarter of last year. This is almost double the house price inflation rate recorded by the overall major metro areas during the same period. House price inflation in the former townships has nowoutperformed the major metros for five consecutive quarters. Despite the robust growth in

house prices in the former township areas remains the most affordable area in the housing market, with an average estimated house price of R300 000. With a young population, a large portion of whomhave not yet entered the housing market as potential buyers, there is still considerable potential growth. This is likely to underpin the local housing market – particularly in the affordable price bands, during the years ahead. House prices continue to strength- en in the Western Cape. During the course of last year, house price infla- tion in the Cape accelerated from 8,2% in late-2014 to 10,4% in De- cember 2015 – bringing the average for the full year to 9%, which is more than 3% above the national average. House price inflation continued to accelerate in early-2016, with prices rising by 10,6% above year earlier levels in January. Says Golding: “Interestingly, un-

like the other major provinces, in the Cape the strengthening in house prices is relatively broadly-based and is not limited to the lower-price band, as is the case in both Gauteng and KZN. Another regional housing market which is bucking the national trend of slowing house price inflation is the Eastern Cape. Looking at the overall regional performance, the Eastern Cape is showing signs of a slight slowdown – with total regional unit sales during the first half of the year declining by 12,6% from year earlier levels. How- ever, sales within the region’s two largest metros – Port Elizabeth and East London – remained relatively resilient last year. “It is thus the resilient metro

May 2016