The still-thriving property market continues to exceed expectations

The property market continued to exceed expectations during the third quarter of 2021, according to the RE/MAX National Housing Report for Q2 2021.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the results of the latest report reveal a still-thriving property market.

Understandably, the third quarter of 2020 was a period of precedented activity as record-low interest rates and pent-up demand following the Deeds Office closure drove sales to an all-time high but, what could not have been expected was that this period of hyperactivity would last as long as it has. It is now a full year later and we are still seeing record-breaking sales volumes” he says.

According to Lightstone Property data, a total of 44 215 bond registrations were recorded at the Deeds Office between July to September 2021. The RE/MAX National Housing Reports reveal that this figure is 9% up from the last quarter and, quite remarkably, 20% up on Q3 2020’s figures.  

The number of transfers (both bonded and unbonded) recorded at the Deeds Office between July and September 2021 amounted to 60 025* – 2% up on last quarter and a 25% year-on-year (y/y) increase.

Of the 60 025 transfers, a total of 29 553* freehold properties and 14 977* sectional title units were sold across South Africa (these figures exclude estates, farms, and land only transfers). The number of freehold properties registered increased by 20% y/y and remained steady quarter-on-quarter (q/q). Sectional titles increased by 17% y/y and 2% q/q.

Strong house price appreciation

Along with an increase in the number of transactions, house prices also climbed steadily during 2021’s Q3. According to Lightstone Property data, the nationwide average price of sectional titles for Q3 2021 is R1 056 417* which, when reviewed against the figures from previous RE/MAX National Housing Reports, is an increase of 9% y/y and 1% q/q.

The nationwide average price of freehold homes is R1 352 712*, which is a 2% increase when compared to Q2 2021 and a 21% increase when compared with Q3 2020. According to Lightstone, year-to-date, the Average Price Changes per annum for sectional titles is 6% and 12% for freehold properties. The Average Active RE/MAX Listing Price for July – September 2021 amounted to R4 093 400.85 – a 24% increase q/q and an increase of 18% y/y.

House price appreciation is strongly linked to the rules of supply and demand. When buyer activity is high, sellers are more likely to achieve higher asking prices. This then causes greater house price appreciation until the demand levels out” Goslett explains.

Lightstone Property data also reveals that the average bond amount granted during this period amounted to R1 287 000. The RE/MAX National Housing Reports reflect that this is an increase of 3% since last quarter and 16% since Q3 2020.

Activity within price brackets

Sales priced between R800 000 and R1.5 million continue to account for the largest portion at 26.7%* of all transfers occurring during 2021’s Q3. Transfers between R400 000 – R800 000 follow close behind at 23.1%* of the total transfers. Following this figure were transfers priced below R400 000 which now account for 22.9%* of all transfers during Q3. Sales between R1.5 million to R3 million accounted for 20.1%* and those priced above R3 million accounted for 7.2%* of the total transfers this quarter, which is a healthy figure for the market segment.

According to Private Property, the median asking price per province for the third quarter of 2021 were as follows:

**Disclaimer: The data reflected herein represents data that is voluntarily obtained from subscribers from the Private Property South Africa’s website and is based solely on data collected by Private Property South Africa (Pty) Ltd. Further, the data reflected herein is accurate as per the Private Property South Africa database dated 05 July 2021. Reliance on such data is at the sole discretion of subscribers and Private Property South Africa hereby indemnifies itself of any consequence of such reliance.

While I am grateful to see the local housing market thriving as it is, I also do not expect that the market will remain this active forever. It is likely that demand will dampen as soon as the cycle of interest rate hikes starts. Until then, I would encourage buyers to make the most of the low interest rates and sellers should seize the opportunity to sell now while buyer demand is still high,” Goslett concludes.