Property Brief - March 2023 (Launch edition)

This Property Brief, as the launch version, explains why prices for all buyers reached new highs in 2022. But if we adjust for inflation, we see a marginal decline, mainly due to financial pressures on consumers and homebuyers since the beginning of last year. Over the past six years, homebuying has nevertheless been a good hedge against inflation. Since 2016, the average nominal house price increased by 8.6% for all buyers and 7.1% for first -time buyers, compared to average inflation over this period of 5%.

Rising inflation and higher intere­ rates have eroded purchasing power for prospective homebuyers, with the average value returning to the levels of early 2021 (figure 2). The spread between home loans for fir­ -time buyers and all buyers has declined, from 92.9% in the fir­ qua‑ er of 2019 to 86.2% during the fir­ two months of 2023. Since Q1 2019, the average value of these home loans has outpaced inflation by a healthy margin. For all homebuyers, the average value increased by 8.6% per annum to R1.18 million and for fir­ -time buyers by 10.8% per annum to R1.04 million at the end of 2022. During these four years, the consumer price index (CPI) only increased by 4.7% per annum.

Average residential property prices in the provinces that are home to the large­ metropolitan municipalities remain higher than elsewhere. We have calculated this by weighting the individual provincial prices with their relative shares of the number of approved BetterBond home loan applications. At R1.468 million, the Gauteng average house price is nearly identical to the national average of R1.465 million. For more information on the activity in the property market for the month of March, download the publication using the link below.

You can read all the editions of Property Brief here.