Lightstone Property’s latest report highlights a dramatic increase in South African property prices since the advent of democracy in 1994. Average property prices have surged by over 833%, significantly outpacing the 451.9% inflation rate over the same period. This translates to an average nominal sale price rising from just under R150,000 in 1994 to R1.4 million in early 2024. Despite the current annual property inflation rate at 3.22%, property inflation varies significantly across regions and value segments.

High-value properties saw modest inflation increases to 2.1%, mid-value properties to 3.5%, and luxury properties to 3.1%. Conversely, the low-value segment experienced a substantial increase, with an annual property inflation rate of 12.7%. Provincially, the North West and Western Cape exceeded the national property inflation rate, while Gauteng and KwaZulu-Natal lagged at 0.23% and 0.42%, respectively. Limpopo’s rate was negative at -1.14%.

The disparity in property inflation is more pronounced in coastal regions, driven by semigration and foreign buyers, with areas like the West Coast, Capricorn, and the Garden Route experiencing higher growth rates. In contrast, traditional metropolitan areas such as Durban and Johannesburg have seen declines or stagnation in house prices.

High interest rates, maintained at 15-year highs, have exacerbated the financial strain on homeowners, with average monthly bond repayments increasing by R4,247 since May 2023. This financial pressure is reflected in the rise of home loan delinquencies and a shift towards more affordable property segments. Despite a 6.7% increase in new home loans in the first quarter of 2024, the average value of these loans decreased by 6.2%, indicating financial strain and a growing number of first-time home buyers entering the market.