Coastal property prices are outshining other property types across South Africa, Pam Golding Properties (PGP) CEO Dr Andrew Golding said.
According to PGP’s Residential Property Index, the Covid-19 induced boom in freehold residential property price inflation continues to fade when compared with sectional title. The gap has narrowed to 2.4% in April 2022, having peaked at 3.9% in March 2021.
“This would indicate that the convenience factor and appeal of lock-up-and-go sectional title properties in prime locations and hubs around the country, including those in vibrant mixed-use developments and in lifestyle estates, has re-emerged as everyday life more or less returns to normality. This has offset, to some degree, the increased demand seen during the early waves of Covid-19 for properties with more living and open space,” Golding said.
He said the index revealed that while non-coastal residential property price growth had slowed sharply to 4.8% in January 2022, which is the latest data available, price growth of coastal homes, located within 5km of the coastline, remained steady at a robust 6.8% that month. Therefore, the coastal price premium widened to more than 2% for the first time since early 2018.
More and more people are attracted to the beauty of SA’s coastline and to new opportunities in cities like Cape Town and Port Elizabeth. People are semigrating to start their own businesses and to work for offshore companies while living in gorgeous locales such as Franschoek and the Atlantic Seaboard.
“Apart from those seeking immediate or future retirement, a leisure property, or a more balanced lifestyle, including those with young families; due to its very nature coastal property has and always will enjoy a strong demand. This is particularly as many continue to be able to work from home in a preferred location,” said Dr Golding.
House price growth in all major metro housing markets has been slowing in 2022. However, Nelson Mandela Bay, one of the smallest metro housing markets remains the top performing market with a recent data revision by data specialists Lightstone, showing a renewed acceleration in house price inflation of 7.6% in January.
Among the major metro housing markets, Ekurhuleni has come top with growth of 6.3% in January, while Tshwane saw house price growth of 5.1%. These two Gauteng metro housing markets were followed by Cape Town at 4.6%, eThekwini at 4.3% and Johannesburg at 2.6%.
Dr Golding said house prices in the Northern Cape continued to soar, reaching 9.2% in January, while growth in house prices in the Eastern Cape inched higher, rising by 6.45% in the same month.
“From a national perspective, where data is available to April 2022, the slowdown in house price inflation continues,” he said.
It eased from a mid-2021 peak of 5.9% to 4.8% in April 2022. After averaging 5.7% last year, house price inflation has averaged 4.95% in the year to date. The Western Cape recorded the strongest growth rate of 6.3% in April this year, followed by KwaZulu-Natal at 5.2% and Gauteng 4.2%.