Lightstone figures show properties with best price growth

13 June 2018

If you are considering buying a home based on current rates of price growth, your best bet would be to buy a home on the coast or one that costs less than R250 000.

The latest figures from Lightstone show the price inflation of homes in these categories are far outpacing the rest.

Lightstone's Residential Property Index also shows national house prices are growing by 3.85% annually. The annual price increase for homes under R250 000 is 26.8%, while it is only 0.4% for homes over R1.5 million.

Lightstone compares the rates of coastal properties - those located within enumerator areas 500m of the coastline - and those further inland. Its findings show coastal homes recorded annual growth rates of 7.7% compared to inland properties with rates of 5%.

The index shows provincial inflation rates to be:

Western Cape - 8.5%

Eastern Cape - 6.8%

Free State - 3.3%

KwaZulu-Natal - 2.7%

Mpumalanga - 2.5%

Limpopo - 3.1%

Gauteng - 4%

North West - 3.7%

When comparing growth rates of municipalities, Lightstone says: "The inland municipalities of Ekurhuleni, City of Tshwane and City of Johannesburg metros are growing stably at rates between 3% and 6% whereas the coastal municipalities are generally performing above this range."

The annual rates for these municipalities at the end of January are 3.4% in Ekurhuleni, 5.4% in Pretoria and 3.3% in Joburg.

On the coast, Cape Town's annual price growth was 10.3% at the end of January while eThekwini's was only 2.7%.

Sectional title vs full title: At the end of April, sectional title inflation was 4.1%, while the full title growth rate was 3.1%.

Inflation based on property value: Owners of homes classified as low value have reason to be pleased with price inflation rates far outpacing those of higher value properties.

According to Lightstone: "Both the low value and mid value wealth segments continue to buck the trend by growing at more than 6% annually while the high and luxury wealth segments are inflating at rates below 4%."

The value bands are classified as:

Luxury: over R1.5 milllion

High value: R700 000 to R1.5m

Mid value: R250 000 to R700 000

Low value: under R250 000

The index shows homes classified as luxury have recorded annual price increases of only 0.4% as at the end of April, while "high value" homes have seen increases of 3.1%.

While mid-value homes are faring better, with annual price growth of 6.7%, owners of low-value homes have seen price growth of 26.8%.

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