These are SA's hottest property markets
- The northern suburbs of Durban are seeing much stronger house price growth than other metro areas, a new FNB survey shows.
- House prices in Joburg's priciest suburbs are lower than a year ago, and Cape Town looks set for more house price pain.
- But properties on the lower side of the market are looking much more solid than more expensive properties, jumping by 16% in the first quarter.
- For more stories, go to Business Insider SA.
In a very weak economy, house prices have increased by only 3.5% in the three months of 2019, compared to the same period last year, FNB reported this week.
But some are seeing much stronger growth – specifically eThekwini. FNB notes that it is performing better than all major metros in South Africa, with average house price growth of 5% in the first quarter of 2019.
Read: Almost no house-sellers are getting their asking prices - here's what SA homes are going for now
Areas in the northern parts of Durban, closer to the airport, are doing particularly well. House prices in the North Coast Inland region, which includes areas such as Tongaat and Redcliffe, have increased by 41% over the past five years.
FNB says this has been supported by new developments in the area.
Here’s how other areas are faring:
House price growth has now been falling for thirteen consecutive quarters – and the pricier areas are worst affected.
Prices in Sandton are actually now 1.7% cheaper than a year ago. Randburg and Midrand saw weak house price growth of 0.4% and 2.0% respectively.
Soweto is positively booming by comparison. Average house prices are up almost 5% over the past year. Last year, house prices in Soweto jumped more than 14%.
Its house prices are seeing the slowest price growth since 2009, and FNB thinks that “further downward adjustment” could be ahead as prices are still not affordable for many buyers.
House prices in the first quarter were only 1.5% stronger than a year ago, with expensive areas losing value. Prices in Pretoria East and Centurion fell by 0.01% and 0.8% respectively. In contrast, the northern suburbs, primarily comprised of middle and low-income areas, are trending upwards, says FNB.
Akasia, which primarily offers middle-priced housing alternatives, jumped by almost 7%, while Mabopane/Soshanguve saw growth of almost 10%.
Cheaper is cheerful
The new FNB survey shows that house prices in the less expensive sector of the market are doing much better than pricier properties.
House prices in the low-income band (with an average purchase price of R395 900) jumped by an average 16.3% in the past year, while the lower-middle segment (average purchase price R638 200) averaged 6.8%. The middle segment, which corresponds to homes in the middle 20% of the price spectrum (average purchase price R935 000), registered 4.2%.
On the higher end, upper-income (average purchase price R1.3 million) and luxury value (average purchase price R2.3 million) saw growth of 3.0% and 0.8% respectively.
FNB says that its data show that there’s a “moderate oversupply” of properties in middle- to upper-income areas – particularly of sectional title properties. This is consistent with a surge in the new flats and townhouses over recent years.
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