“The higher average house price growth of the townships in recent times appears to continue to reflect greater residential supply constraints relative to demand, compared with the former ‘white suburban areas’, or areas with other former race classifications,” said John Loos, FNB property sector economist, noting the township markets appear to be more cyclical than the higher-priced markets, experiencing higher price inflation peaks and lower troughs. “The FNB House Price Index for areas formerly classified as black townships in the six major metro regions rose by a 9.8% year-on-year in Q2 2016.
“This is mildly lower than the revised 10.7% price growth rate of the prior quarter, and down from a 12.5% high reached in Q2 2015.”
According to FNB’s Former Township House Price Index, the township market continued to inflate well above the overall Major Metro Regions House Price Index’s (Ethekwini, Cape Town, Nelson Mandela Bay, Ekurhuleni, Joburg and Tshwane) growth rate of 4.4%.
It remains, on average, the most affordable market, with an average estimated house price of R359,980.