How the prolonged lockdown has changed house prices in South Africa

Remax’s most recent housing market report shows that the property market continued to beat expectations in the third quarter of this year instead of falling to pre-Covid levels.

The report, which covers property sales in South Africa from July to September, shows that the property market has recovered and expanded in line with previous Remax projections due to historically low interest rates and pent-up demand.

“However, we didn’t expect this period of hyperactivity to last that long,” said Adrian Goslett, CEO of Remax Southern Africa. “It’s now a full year later and we’re still seeing record sales,” he said.

Data from Lightstone Property shows that from July to September 2021, 44,215 bond registrations were registered in the Deeds Office. Remax said that number was up 9% from the most recent quarter and 20% up from the third quarter 2020 numbers.

The number of remittances registered with the Deeds Office between July and September (both bonded and non-bonded) was 60,025. This amount is 2% higher than last quarter and 25% higher than last year.

Of the 60,025 transfers, 29,553 condos and 14,977 subtitle units were sold nationwide. The number of registered condominiums increased by 20% compared to the previous year and remained constant compared to the previous quarter. Section titles rose 17% year over year and 2% quarter over quarter.

House prices

In addition to an increase in the number of transactions, house prices also rose steadily in the third quarter of this year.

Lightstone’s data shows that the nationwide average price for section titles for the third quarter of 2021 is R1,056,417, an increase of 9% over the same period last year.

The nationwide average price for condominiums is R1,352,712, an increase of 2% from the second quarter of 2021 and an increase of 21% from the third quarter of 2020.

According to Lightstone, the average price change per year for section titles is 6% and 12% for condominiums.

“The appreciation of home prices is strongly linked to the rules of supply and demand. When buyer activity is high, sellers are more likely to get higher asking prices. This then leads to a greater appreciation in house prices until demand levels off, ”said Goslett.

“The data from the Lightstone property also shows that the average loan amount granted during this period was R1,287,000, an increase of 16% since the third quarter of 2020.”

Sales priced between R800,000 and R1.5 million continue to account for the largest share, accounting for 26.7% of all transfers in the third quarter of 2021. Transfers between R400,000 – R800,000 follow closely behind with 23.1% of the total transfers.

That number was followed by transfers priced below R400,000, which now account for 22.9% of all transfers in the third quarter.

“Sales between R 1.5 million and R 3 million accounted for 20.1% * and sales above R 3 million accounted for 7.2% of total transfers in the quarter, which is a healthy number for this market segment,” said Remax.

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