The South African Residential Property Market: An Overview
Residential markets in South Africa behave very differently across a number of important performance indicators. Properties under R600 000 have been growing for several years.
South Africa’s residential property market is the largest component of the South African property market, comprising the majority of property assets within the country, and an important component of household wealth. The South African deeds registry counts 6.7 million properties on its registry, worth R5.2 trillion. Of this, about 5.8 million registered properties, or 86%, are considered residential, ranging from sectional title and freehold properties, to estates; including government sponsored homes, homes occupied by their owners or rented to others, and holiday homes; and found across the country, from rural areas, to mining towns, to small and secondary cities, to metro municipalities. Almost 60% of the total formal residential property market is found in the eight metro muncipalities. Figure 1 shows the distribution of residential properties on the deeds registry by key market segments: properties worth under R300 000, between R300 000 and R600 000, between R600 000 and R1.2 million and over R1.2 million.
The majority of the residential property market – 63% in 2013 – includes homes valued at less than R600 000. Of this, two thirds (or 44% of all properties) are homes that are valued at less than R300 000, of which the majority are estimated to be government sponsored homes. When a detailed analysis was done in 2010, it was found that 24% of all residential properties formally registered on the deeds registry were government-sponsored homes: clear evidence of the significance of government’s subsidised housing programme and the sheer volume of property assets transferred to qualifying beneficiaries since 1994.
Every year, as new houses or residential properties are built (whether by government or the private sector, and whether for ownership or for rent), as existing properties are traded, or as old properties are converted into new uses, the size and composition of the residential property market changes. It is the role of the state to ensure that the property sector responds to the changing needs and affordability of our population, so that all residents in South Africa can realise their constitutional right to access to adequate housing.
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This report was prepared with the support of the Estate Agency Affairs Board.