Inland property prices soar
Property prices for large homes in SA are soaring in the ‘secondary’ inland provinces, much more so than in the major metropolitan areas, an expert says.

According to Tony Clarke, Rawson Properties MD, the Western Cape and Gauteng are now losing out, as provinces like Mpumalanga — which has seen a near 34 percent year-on-year rise in house prices — and Limpopo Province and the Free State — which have both seen a 30 percent increase — take off.

By comparison, the large home category in the Western Cape and Gauteng is seeing 16.6 percent year-on-year growth.

Cape Town prices

The main reason for this, says Clarke, is that the property market in the Western Cape and Gauteng is already starting to stabilise after a boom in 2004, whereas the country provinces are only now catching up.

Prices in Johannesburg are appreciating faster than those in Cape Town, particularly in the lower category homes, with prices rising some 20 percent per annum.

“In Johannesburg there is a strong demand for smaller properties in security complexes and this is driving prices upwards. Johannesburg is catching up with Cape Town prices, which are still the most expensive in the country.”

Prices 'should rise more'

Clarke says that so long as the economy can maintain four to six percent GDP growth, prices will continue to rise. He adds that coastal areas are the ones to watch.

“Worldwide, coastal property is booming due to the scarcity factor. That is why Cape Town property remains the most expensive in the country.”

House price rises are based on Absa’s house price index, which indicates that the average price of small houses (80 to 140m²) is now R632 765, while that of middle size homes (141 to 220m²) is R890 441. That of large homes (221 to 400m²) is now R1.2-million.

Smaller home growth

All categories have seen significant growth year-on-year, but the most impressive has been that of the large homes where the increase was 18.1 percent, Clarke says.

By comparison on a national basis, smaller homes are appreciating at only 10 percent year-on-year and middle-sized homes at 17.7 percent year-on-year.

Article from: www.iafrica.com