Cape Town - If it was ever ever in doubt, it is now official. Data from Statistics SA’s newly launched residential property price index (RPPI) proves Cape Town has the steepest property prices in all of South Africa’s metros.
Stats SA data shows in the last 13 years residential property prices have grown by 141% in Cape Town, outstripping other metropolitan municipalities.
The data shows since August 2014, price increases in Cape Town were consistently higher than in other metros and also that after remaining relatively flat in 2018 and 2019, prices surged further.
On the flip side the price index for Johannesburg recorded the slowest increase over this period, with residential property prices rising on average by 71%.
Stats SA has also published a separate series for South Africa’s nine provinces and eight metro areas and this shows that nationally residential property prices increased by 5.8% in the year to November 2022.
Prices increased by 7.4% in the Western Cape and by 3.6% in Gauteng over this period. Cape Town and Ekurhuleni were the main contributors to the annual inflation rate for all metropolitan areas in November.
Statistician-general Risenga Maluleke said the monthly RPPI currently extends from January 2010 to November 2022, but updates would be published monthly, with the release for December due on May 11.
The RPPI is based on Deeds Office data for actual market transactions, and was developed in partnership with the South African Reserve Bank (SARB), with support from the International Monetary Fund.
FNB property sector strategist John Loos said property price indices don’t tell the full story of market weakness during an economic slowdown.
Loos said: “Market values move slowly, and battle to keep up with market reality in an economic downturn, or in a broad long-term economic stagnation such as the one that has befallen South Africa since over a decade ago.”
Absa economist Peter Worthington said: “We believe that the Reserve Bank’s rapid tightening in 2022 and |
2023 so far will keep house price inflation quite muted in the months ahead.”
With regard to interest rates, RE/ MAX of Southern Africa chief executive Adrian Goslett predicted that in the 2023 housing market affordability would become more of a concern for many homeowners, especially for those who bought when interest rates were at record lows.