Business Insider reports that the house price growth rate in Africa’s richest square mile, Sandton, is lagging behind other suburbs.
An FNB survey shows that the growth rate in prices for Soweto, Randburg and Johannesburg CBD properties is outstripping Sandton.
According to the publication, house prices in Sandton and surrounding suburbs fell by 0,04% year-on-year in the first quarter of 2018 – the weakest performance in the Johannesburg region.
Sandton has also been the weakest performer – with cumulative house price growth of 15,93%, which is well below the region’s average of 23,19%, over the past five years.
The report has shown there is an increased desire in more affordable areas such as Randburg, Midrand and the CBD, with residential property in these areas showing significantly stronger growth.
Soweto, Lenasia and surrounding areas have also outperformed Johannesburg’s northern suburbs, with Soweto being the region’s best-performing residential area in terms of rising house prices.
However, Business Insider says FNB has cautioned that the Diepkloof-Soweto-Meadowlands-Pimville region’s growth may be overstated because of social housing factors. “I’s strongly accelerating growth direction leads us to believe that the low-income end of the Joburg housing market is indeed the stronger segment,” the bank was quoted as saying.
When taking inflation into account, Gauteng house prices have reportedly lost a chunk of value over the past decade. Since the first quarter of 2008, Tshwane’s cumulative real house price decline has been 23,12%, followed by Joburg (-24,19%) and Ekurhuleni (-26,49%).
Additional reporting by Business Insider