In a period of global economic uncertainty and a cycle of rising interest rates, the South African housing market performed unexpectedly well during the second quarter of 2022, according to real estate group RE/MAX.
According to Lightstone Property, a total of 52,949 bond registrations were registered at the Deeds Office between April and June 2022. RE/MAX’s National Housing Reports show that number is up 30% from Q2 2021 figures.
The number of transfers (both bonded and non-bonded) recorded at the Deeds Office for the second quarter was 77,880, an increase of 49% on the previous quarter and 32% on the previous year.
Of the 77,880 conveyances, a total of 37,287 properties and 20,604 parts of property were sold across the country – these figures exclude estates, farms and land-only transfers. The number of registered properties increased by 26% y/y and 42% q/q. Section titles increased by 40% YoY and 50% QoQ.
RE/MAX South Africa regional director and CEO Adrian Goslett said the figures were unprecedented given that activity was expected to decline due to higher interest rates.
“In the first quarter of the year, we have already seen a decrease in activity after the first increase in interest rates announced in November 2021. However, somewhat inexplicably, the housing market has recovered and is now even stronger than last year – and last year was already a record year for our network.
“In fact, with the exception of one month, our network’s total sales for every month this year are higher than last year,” he said.
Slow growth of average housing prices
Despite the increase in activity, Lightstone Property reported that as of the end of May 2022, house price inflation in the country was just 4.46%, falling consistently since the beginning of 2021.
According to their latest figures, the national average unit price for the second quarter of 2022 is R1 049 437, which when compared with previous RE/MAX National Housing Reports represents an increase of just 1% year-on-year and up 3% quarter-over-quarter.
The national average freehold home price is R1,422,901*, which represents an increase of 8% year-on-year and 6% quarter-on-quarter when compared with previous RE/MAX National Housing Reports . RE/MAX’s average active listing price for the second quarter was down slightly quarter-over-quarter and year-over-year to R3,198,460.30.
The cost of housing loans is increasing
On the other hand, the average amount of bonds issued during the period, according to Lightstone Property, was R1,345,000, up 8% year-on-year, according to RE/MAX National Housing Reports.
The bond’s originator, BetterBond, reported the following total loan amounts for repeat buyers in each part of the country:
In the second quarter of 2022, there were no significant changes in sales volumes between different price segments. All price segments remained at the same place as last quarter. Sales between R800,000 and R1.5 million continued to account for the largest share at 26.1% of all transfers in Q2 2022, the property specialist said.
Following this, transfers below 400,000 rubles account for 24%; in third place – transfers in the amount of 400,000 – 800,000 rand – 22.6%; sales between R1.5 million and R3 million account for 19.7%; and those above 3 million rand represent 7.7% of total remittances this quarter.
The Western Cape outperforms all provinces
The Western Cape continues to be a popular expat destination, so much so that all five of the most popular suburbs on remax.co.za can be found in the region:
- Bloubergstrand, Western Cape – 3159 searches
- Sunningdale, Western Cape – 2410 searches
- Parklands, Western Cape – 2315 searches
- Claremont, Western Cape – 2199 searches
- Parklands North, Western Cape – 2150 searches
The Western Cape also continues to be the most expensive province. According to Private Property, the average asking price for active Private Property shares in the province for the second quarter of 2022 was as follows:
“Whether you work from home and need an office, you’ve realized the value of living close to loved ones, you need to downsize due to financial constraints, or you’ve simply found that you no longer like your current home, the pandemic has given many reasons to buy and sell property,” Goslett said.
“I remain interested to see if the expected interest rate hikes will have a more noticeable impact on how active the current housing market will be next quarter.”
Read: R50 million review of homes for sale in one of South Africa’s oldest suburbs
