The Q2 2024 Oobarometer report by Ooba Home Loans reveals that KwaZulu-Natal (KZN) saw a significant decline in residential property prices, the only province to register a double-digit drop when adjusted for inflation. The province experienced -11.4% and -12.3% declines for first-time and repeat homebuyers, respectively, making it the most affected region. Nationally, both overall and first-time homebuyer purchase prices showed modest nominal year-on-year increases of 2.3% and 2.7%, respectively, but real property price growth remains negative when accounting for inflation.

Rhys Dyer, CEO of Ooba Group, noted that the national average purchase price decreased by 1.4% to R1,458,924, while first-time homebuyers saw a 1.8% decline to R1,150,238. The cautious approach by potential buyers due to upcoming elections and expected interest rate adjustments is a contributing factor.

Conversely, the Western Cape showed the strongest growth in Q2 2024, with real terms property price increases of 7.8% for first-time buyers and 6.3% for repeat buyers. Regions like Limpopo, Free State, and Eastern Cape saw price increases, while Mpumalanga, Tshwane, North West, and Johannesburg experienced declines.

Service delivery and investment are critical to real price growth in the property market. Issues in KZN, such as inadequate service delivery, high municipal rates, and infrastructure failures, have led to declining property values. The province’s struggles with water supply, electricity, and deteriorating infrastructure have made it less attractive, prompting residents to relocate to areas with better services. This trend is expected to continue, impacting both residential and business property dynamics in KZN.