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The top 10 South African cities where first-time buyers purchase

monopoly property portfolio resizeWhile there has been a level of overtrading in the Western Cape housing market, which is slowly losing steam, there is still value to be had in Cape Town. This is according to Siphamandla Mkhwanazi, Standard Bank consumer economist, who was speaking at the bank’s launch of its regional and provincial house price index today.

“KwaZulu-Natal’s house price inflation is struggling to get consistent gains, while there is almost no growth in the Eastern Cape,” he said. “Gauteng, however, has reversed many of its earlier gains.”

  • Johannesburg: Showed signs of recovery.

  • Cape Town: Continued to outperform, although steam coming off.

  • Tshwane: Solid performance, supported by strong demand from first-time buyers.

  • eThekwini: Some recovery, but still under pressure. Support coming from up-market areas.

  • Ekurhuleni: House prices took a knock in 2015/16, and now the trajectory points to a recovery.

  • Nelson Mandela Bay: Prices are dropping rapidly, although not declining (in nominal terms) as yet. The metro is dealing with a water crisis and arguably a dysfunctional municipality.

Andrew van der Hoven, head of Home Loans at Standard Bank, said house price growth had a direct link between the time it takes to pay off a home loan and to get 50% equity in the bond.

“On a R1m home loan, with zero house price growth, it will take around 173 months to get 50% equity in the bond; at 1% per annum growth, it will take 148 months, and at 5% per annum growth, a mere 76 months,” he said. “House price growth has a direct link to wealth creation.

“We support clients on every step of their property journey, assisting them to make sound, well informed decisions based on the research we provide. That next step they take must be done with their eyes wide open so that they are assured that they are making the best decisions,” said van der Hoven, noting that for 2016, Standard Bank’s total loan book was worth R336bn and last year provided home loans to about 47,000 customers.

Top 10 first-time home buying markets by volume

Suburb Median income of a first-time buyer in town Median purchase price Median price/m² Median price-to-income ratio
1. Pretoria                                                            R37,415                          R791,245                          R5,830.15                                             1.9
2. Cape Town                                                             R38,433                          R955,061                         R9,067.31                                             2.2
3. Johannesburg                                                             R40,740                          R920,106                          R5,853.38                                            2.1
4. Durban                                                             R34,700                          R769,179                          R6,596.73                                             2.0
5. Roodepoort                                                            R36,827                          R817,557                          R5,439.14                                             2.0
6. Sandton                                                            R55,640                       R1,231,666                        R11,458.33                                             2.1
7. Midrand                                                             R40,123                         R868,203                          R6,596.85                                             2.0
8. Port Elizabeth                                                             R31,094                          R679,364                         R4,210.52                                             1.9
9. Centurion                                                             R51,642                       R1,139,697                          R8,508.77                                            2.0
10. Randburg                                                             R46,277                       R1,069,536                          R7,731.98                                             2.1


David A Steynberg, managing editor and director of HomeTimes, has more than 10 years of experience as both a journalist and editor, having headed up Business Day’s HomeFront supplement, SAPOA’s range of four printed titles, digimags Asset in Africa and the South African Planning Institute’s official title, Planning Africa, as well as B2B titles, Building Africa and Water, Sewage & Effluent magazines. He began his career at Farmer’s Weekly magazine before moving on to People Magazine where he was awarded two Excellence Awards for Best Real Life feature as well as Writer of the Year runner-up. He is also a past fellow of the International Women’s Media Foundation.

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