"In a weaker economy, the demand is mainly about primary housing. On the one hand, you might see some relief from the impact of the drought. But, holiday towns and smaller regions might take more strain. In the minor provinces, the other negative impact on house prices has been the mining sector that has not done so well in last few years."
Provinces According To House Price GrowthGauteng does not have the weakest house price growth. In terms of house price growth, Mpumalanga, Free State, Northern Cape, North West, and Limpopo Provinces have risen by a mere 0.8% year-on-year in the 3rd quarter. While the Eastern Cape Province has a growth rate of just 0.1%. Slightly stronger than Gauteng was KZN, with a house price growth rate of 4.2% year-on-year, albeit also on a slowing trend, FNB said. The Western Cape enjoys a stronger-than-most property price inflation rate (10.5%), which, when considering the lifestyle and economic opportunities, is believable.
Average House Prices In All Major Provinces
- Western Cape – R1 256 372
- Gauteng – R1 016 804
- KwaZulu-Natal – R988 142
- Eastern Cape – R815 914
- Other five provinces – R803 692
Average Salary Per Annum/ ProvinceAll estimations of salary were provided by IHS Global Insight South Africa, a data and business insight company.
- Western Cape - R245 788 p.a.
- Gauteng - R229 192 p.a.
- Kwazulu-Natal - R173 103 p.a.
Major Four Provinces’ Income Comparison
|Province||Per household income||Per capita income|
|Gauteng||R229 192||R72 951|
|Western Cape||R245 788||R70 628|
|KZN||R173 103||R42 702|
|Eastern Cape||R133 139||R33 791|
|Northern Cape, Mpumalanga, Limpopo, The Free State, North-West||R142 848||R39 793|
The ResultsGauteng is the most affordable of all major regions. With an estimated average house price/per household income ratio of 4.44, Loos noted that Gauteng is the most affordable of the major regions in 2015. The Western Cape is the second least affordable with a ratio of 5.11. The Eastern Cape is thought to be the least affordable with an average house price/ per household income ratio of 6.13 in 2015. The Western Cape's affordability ratio has increased from 4.37 in 2011 to 5.11 in 2015, this despite a high household income. Tshwane property prices are, however, healthy. According to Loos, the FNB Estate Agents Survey indicated that Tshwane is the stronger in terms of house price growth.
"None of the areas in Gauteng have been wonderful in house price growth. But, the eastern suburbs of Tshwane seem to have become a popular area for commuters who work in Johannesburg. The Gautrain might have helped this tendency too, but one can't say for certain."