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Monday May 28, 2018

Durban and KZN take lead in property price growth

Sixteen years ago, at the end of 2001, the average house price in South Africa was R287 000. Fast forward to the end of last year and that price was up by almost 300%, to end 2017 at R1.11 million.

Surprisingly, historical data calculations from Rode & Associates, based on FNB's average house prices, indicate Durban and KwaZulu- Natal residents have seen the biggest price growth since then, even exceeding that of Cape Town and the Western Cape.

Comparing the annual growth rates, the figures show the increases from 2001 to 2017 as follows:

  • eThekwini: 334% up from R219 268 to R952 409;

  • Cape Town: 332% increase from R360 740 to R1 557 580;

  • Ekurhuleni: 340% up from R225 649 to R992 906;

  • Joburg: 276% increase from R311 882 to R1 174 186;

  • Tshwane: 275% increase from R293 716 to R1 100 910;

  • Nelson Mandela Bay: 262% increase from R215 096 to R778 813.

    Calculations show the provincial increases in the price of homes to be:

  • KwaZulu- Natal: 339% up from R246 167 to R1 081 433;

  • Western Cape: 297% up from R365 936 to R1 452 508;

  • Gauteng: 287% increase from R278 073 to R1 075 237;

  • Eastern Cape: 226% up from R254 282 to R829 557;

  • National: 295% increase from R277 821 to R1 096 322.

    Regarding the figures, Rode & Associate's Kobus Lamprecht says it is important to consider the base effect. At the end of 2001, Cape Town house prices were about 70% more expensive than eThekwini and the Western Cape 50% more expensive than KwaZulu-Natal.

    Using the same calculations, but for the 10 years from 2007 to 2017, Cape Town and the Western Cape were "clear winners". "This is probably as semigration started to become more prevalent due to the region's perceived relatively better political and economic landscape."

    Cape Town and the Western Cape recorded respective 83.1% and 66.2% increases while house price inflation in eThekwini and KwaZulu-Natal was 37.2% and 47.3%, he says.

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