Where to find the cheapest homes in SA

province_mapThe Eastern Cape is still the province with the least expensive real estate in SA, even though prices there have risen by an inflation-beating 7% in the past 12 months to an average of R663 000.

That’s the word from BetterBond, SA’s biggest mortgage originator, which is responsible for 25% of all residential bonds registered in the Deeds Office – and keeps track of home loan applications to, and bond grants from, all the major lenders.

The Western Cape, the BetterBond statistics show, is still the most expensive region in which to buy a home, even though prices there have only risen 3,5% in the past year. The average in the province now stands at R1,07m.

It is, however, the Free State which has experienced the highest rate of price growth over the past year (12,8%); followed by Limpopo (12%) and Mpumalanga (10,7%).

Home prices in these three regions now average R731 000, R715 000 and R847 000 respectively, and while the high growth rates have pleased existing owners and investors, they have obviously made it more difficult for first-time buyers to gain entry to the market.

One reason for the rapidly rising prices in these three provinces could be the fact that despite rapidly rising demand – especially in Bloemfontein, Polokwane and Mbombela – there have been hardly any new homes built there in recent years.

According to StatsSA, only 1000 new houses were built in the Free State during 2012, compared to about 14 000 in Gauteng and 9000 in the Western Cape. The year saw some 1500 new houses being built in Mpumalanga, and just 300 in Limpopo.

The StatsSA figures also show that only 900 new flats and townhouses in total were built in the Free State, Limpopo and Mpumalanga in 2012, compared with 5000 in Gauteng and 3000 in the Western Cape.

The good news is that developers have seen the potential in this situation and are planning to build many more homes in the Free State, Limpopo and Mpumalanga. Plans passed for new houses in the Free State totalled 2000 in 2012, and those for new flats and townhouses some 800. House plans passed for Limpopo and Mpumalanga totalled around 3300, and those for flats and townhouses around 900.

Meanwhile, the below-inflation price increases achieved in the Western Cape as well Gauteng (1,3%) and KwaZulu-Natal (-3%) in the past 12 months indicate that there is still a surplus of stock to be absorbed in these provinces, making them a good bet for both homebuyers and investors.


Tags: , , , , , ,

About BetterLife Home Loans

Since 2003 BetterLife Home Loans has been SA’s No.1 Bond Originator, handling the entire home loan application process on your behalf – free of charge! Our aim is still to source the best interest rate for you by submitting your home loan application to all the major banks. There is no easier way to apply for a Bond or Home Loan in South Africa!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: