Time to buy now as prices start to rise

The Western Cape, where property prices fell 0,3% last year, is the most expensive province in which to buy residential property, and Cape Town is the city with the highest average price in every home category, even if one excludes the multimillion-rand trophy properties strung out along the Atlantic Seaboard.

On the other hand, says Aida CEO Young Carr, the latest Absa research shows that the prices of small, medium and large “middle segment” homes in the northern and western suburbs of Johannesburg, (where prices rose 5,2% last year), often exceed the Cape Town averages for the same categories.

“For example, the average price of a medium size home in Johannesburg’s northern suburbs is R1,34m, while the average price of a medium size home in Cape Town is R1,26m.”

The latest Absa Quarterly Housing Review, he notes, also reveals that there is no one province with the lowest prices in all of the small, medium and large home categories, but that Port Elizabeth is definitely the cheapest city overall.

“The average price for a small home in Port Elizabeth is currently around R514 000, for example, compared to R593 000 in the central and southern suburbs of Johannesburg, which is the next cheapest area, followed by Durban/ Pinetown, where a small home costs an average of R711 000.”

As far as medium size homes go, Carr says, Port Elizabeth, East London and the central and southern suburbs of Johannesburg offer the best prospects for budget-conscious buyers, while the Eastern Cape and the East Rand in Gauteng are currently the least expensive places to buy larger homes.

“Meanwhile, it is interesting to note that according to the Absa figures, only two of the nine provinces experienced a year-on-year decline in property prices last year, while some metros actually experienced an above-inflation (real) increase in property prices.

“And on top of that, the FNB Property Barometer figures just released show that the yoy increase in property prices nationally was 6,6% in January and 6,7% in February.

“These are strong indicators that now is the time to buy, before the upward movement of prices starts to negate the benefits of low interest rates, or indeed before interest rates start to rise once more.”

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