Gauteng's Residential Market rebounds

• Gauteng's property market is recovering, with Tshwane showing strong growth in purchase prices and first-time homebuyer demand.

• Affordability drives demand in Gauteng, where properties are more affordable than in regions like the Western Cape.

• First-time homebuyers are returning as interest rates drop, particularly in Tshwane and Gauteng South & East.

• Investment property demand in Gauteng has risen, with strong competition from other markets, especially post-pandemic.

Gauteng's residential property market is showing strong signs of recovery following the exodus of buyers to coastal regions during the COVID-19 pandemic. According to Gavin Lomberg, CEO of ooba Home Loans, Tshwane has been a key area of growth, with improvements in purchase prices, demand from first-time buyers, and increased interest in investment properties.

Affordability remains a significant factor driving the market's rebound. In comparison to the Western Cape, where the average property price sits at R1.94 million, Gauteng offers more value for money. This makes it attractive to buyers, particularly in a “higher for longer” interest rate environment. As interest rates are expected to decrease following the recent rate cut, more renters may decide to enter the market, particularly in areas that offer the best value.

Despite the boom in Western Cape property demand in recent years, Gauteng remains the economic powerhouse of South Africa and continues to attract a large share of the working population, especially younger professionals and first-time buyers. Gauteng accounts for 34.7% of the country’s housing market, with Johannesburg as its largest metro market.

Lomberg highlights several trends driving the market’s resilience. Affordability tops the list, with a significant portion of home loan applications being for properties valued under R1.5 million. Gauteng’s average property prices are on the rise, with the South & East region seeing a 7.6% increase in purchase prices since December 2023. Tshwane experienced an even stronger 13.4% growth over the same period, indicating a healthy recovery.

First-time homebuyers, who had been sidelined by rising interest rates, are returning to the market. Lomberg expects this trend to continue as rates fall, especially in Tshwane, where first-time buyer prices are expected to rise with inflation.

Investment demand in Gauteng has also surged, with growth surpassing pre-pandemic levels. Lomberg believes that with affordability, competitive lending, and lower interest rates, now is the opportune time to invest in Gauteng’s residential property market.