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May 2016
Housing
ng prices rose by 28,5%
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
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
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.
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