Gauteng’s housing market achieved an average of 4.4% overall growth in 2015, in third place behind the Western Cape (10.6%) and KwaZulu-Natal (6%).
But there are some extreme differences between the different metros and suburbs within the province, says Rupert Finnemore, recently appointed Gauteng regional head of Pam Golding Properties (PGP), who was commenting on The Study, PGP’s quarterly research report which incorporates the Pam Golding Properties Residential Property Index.
“Mining and manufacturing towns in Gauteng, for example, have been more severely impacted by the economic downturn, which has in turn had a negative bearing on the house price growth within these areas and skews the picture somewhat,” he says. “On the other hand, centres that are more reliant on service industries rather than mining or manufacturing for growth, such as greater Sandton, Rosebank, Midrand, Soweto, and Pretoria, and a number of others, continue to show rapid development and vigorous local residential property markets.”
Regional break down
In association with property research group, Lightstone, The Study suggests that house price growth within these centres has grown apace with other forms of development: 43.5% for Sandton; 20.3% for Midrand; 104.6% for Soweto; 32% for Centurion and 28.4% for Pretoria.
“Buyers are more than ever looking at value and, critically, location to ensure they obtain the best return from their property investment,” says Finnemore. “As a result, prime locations in Gauteng remain in demand for buyers and tenants, and in some cases the demand for homes well outstrips supply within these areas.
“Sandton remains the financial and commercial capital of SA and is a prime example of a local economy and residential property market that is showing incredible dynamism in the face of the current economic downturn. The greater Sandton area has lost none of its shine, boasting the highest average property prices in Gauteng and among the strongest house price growth nationally in 2015.”
The rise of the affordable sector
The strongest house price growth is being recorded in the more affordable sectors of the residential property market, both in Gauteng and nationally. In this segment of the market, which is defined by Lightstone as properties valued at less than R250,000, prices grew by 28.5% during the first 10 months of 2015.
“There is ongoing demand for properties that are secure and have easy access to places of work, quality schools and retail outlets,” he says. “This, to a large extent, accounts for the popularity of suburbs around centres such as Sandton and Rosebank.
“The appetite for homes in estates also continues unabated, with Lightstone stating that half of SA’s estates are situated within Gauteng and these properties have an average price more than three times higher than other types of residential property, nationally. This demonstrates the ongoing demand for a secure, community-orientated lifestyle.”
The importance of affordability
The Study points out that affordability is becoming an increasingly important issue, and has assisted in generating mounting interest throughout the region in sectional title properties, which are perceived to offer good value.
“Midrand offers greater affordability for potential buyers and is an easy commute via the Gautrain to both Johannesburg and Pretoria,” says Finnemore. “This has helped to make it one of the fastest growing residential areas in the country – the number of sectional title properties having increased by a massive 550% over the past 15 years.”