Housing in Southern Africa May 2016

Housing ng prices rose by 28,5%

substantial increases in real income.” There has also been a significant increase in the number of property purchases by black buyers. Agents in East London estimate that black property buyers accounted for be- tween 60% and 80% of total sales last year. The impact of new entrants into these metro markets is evident in Port Elizabeth, whichhas experienced particularly strong levels of activity among first-time buyers. These buyers have been most ac- tive in the lower-price band below R1 million. According to Lightstone data, approximately 56% of all sales in Port Elizabeth last year were priced at R800 000 or less. Although house price inflation in KwaZulu-Natal as a region is

markets which appear to be driving the rebound in the regional housing market. House price inflation in Port Elizabeth accelerated to 7,4% in the final quarter of last year. While in East London house prices increased by 15,2% from the previous year,” says Golding. “Housing demand in these met- ros has been fuelled by an influx of people from surrounding rural areas. However, analysts believe that strong housing demand in themajor metros is primarily due to the growingmiddle class in the region. The burgeoning middle class in the area is at least partially attributable to increased employment in the public sector. In recent years, public sector workers’ remuneration has increased more rapidly than inflation, resulting in

losing momentum, it is slowing from a relatively high base and continues to marginally outperform the na- tional average. House price inflation in the province averaged 6,5% last year – exceeding bothGauteng (5,1%) and the overall South African housing market (5,8%). Among the major metro areas, Durban is experiencing the slowest growth in house price inflation – ris- ing by just 5,4% in October. Unlike South Africa’s other major provinces, the housingmarket in KZN is not being driven by strong growth in the major metro region. Instead, it is growth nodes along the north coast – including Durban North and beyond – which are behind the still high levels of housingmarket activity in the region. ■

May 2016