South Africa’s residential property market is recovering strongly, with house prices now 39% above pre-pandemic levels. BetterBond’s November Property Brief reports nominal annual house price growth of 5.9% overall, with 4.1% for first-time buyers and 3.3% for all buyers. Consumer inflation at 3.8% suggests house prices may soon rise in real terms.

Home loan activity underscores this recovery, with application volumes up 30% year-on-year and 18% quarter-on-quarter. The Western Cape continues to lead with a 7.7% average price increase between March 2023 and March 2024, driven by ongoing semigration trends. Lightstone notes that 14 of 15 towns with a net gain in homeowners are in the Western Cape. In contrast, Gauteng saw a modest 0.7% price growth over the same period.

The proportion of negative sales, where properties sell for less than their purchase price, has declined, reflecting renewed market activity. However, the impact of high interest rates persists. First-time buyers have faced a 13% rise in average deposit values, and homebuyers overall are paying 4.7% more on deposits. Despite this, four regions—Western Cape, Greater Pretoria, Johannesburg North West, and Mpumalanga—reported home loan values exceeding R1 million on average over the past two years.

With interest rates expected to drop further, possibly by 50 basis points before year-end, experts anticipate continued house price inflation and improved affordability. These factors, combined with strong buyer demand, are poised to sustain the upward trajectory of South Africa’s housing market recovery.