House prices are falling in Sandton, but Soweto properties are showing strong growth
- Sandton’s house prices are lagging behind the rest of Johannesburg, a FNB survey shows.
- The growth rate in prices for Soweto, Randburg and the Johannesburg CBD is outperforming Sandton’s.
Sandton may be Africa’s richest square mile, but the latest First National Bank’s (FNB) property barometer shows its house price growth rate is lagging behind other suburbs.
In fact, house prices in Sandton and its surrounding plush suburbs fell by 0.04% year-on-year in the first quarter of 2018 – the weakest performance in the Johannesburg region.
Over the past five years, Sandton has also been the weakest performer – with cumulative house price growth of 15.93%, well below the region’s average of 23.19%.
From the table, it is evident that there is increased appetite in more affordable areas – Randburg, Midrand and the CBD, among others. Residential property prices in these areas showed significantly stronger growth.
Soweto, Lenasia and surrounding areas also outperformed the swanky northern suburbs. Soweto is the region’s best-performing residential area in terms of rising house prices.
FNB does caution that the Diepkloof-Soweto-Meadowlands-Pimville region’s growth may be overstated because of social housing factors. Still, its “strongly accelerating growth direction … leads us to believe that the low income end of the Joburg housing market is indeed the stronger segment”.
When inflation is taken into account, Gauteng house prices have lost a chunk of value over the past decade.
Since the 1st quarter of 2008, Tshwane’s cumulative real house price decline has been 23.12%, followed by Joburg (-24.19%) and Ekurhuleni (-26.49%).
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