The grip of high interest rates, coupled with inflation and job insecurity, has made the dream of homeownership challenging for many South Africans. However, amid these economic headwinds, a glimmer of hope shines through in the form of affordable property options in Johannesburg. The City of Gold, renowned as the economic powerhouse of South Africa, has also emerged as the most affordable metro for budget-conscious buyers and renters alike.
What Lightstone data says
According to the data firm, the average transaction price for the metro is around R1.2 million. This is below the national average of R1.3 million, presenting a more affordable entry point into the property market. Lightstone also finds that almost 77% of this year's transactions have been below the R1.5 million price mark, with almost half (47%) of these below R700,000.
The average price for first-time buyer homes is around R700,000 to R800,000 giving budget-conscious buyers options that are in line with their needs. "Buyers don't have the same appetite to pay the prices they were five to ten years ago," says David Savage, Sales Manager at Century 21 Sandton. "This has created an even bigger gap between the sellers' expectations and the buyer's offers, creating a strong market for homes on the lower end."
Factors driving the real estate market
According to Savage, since buyers are actively searching for value for money, Johannesburg has become a viable option relatively compared to coastal cities in particular. "As the most affordable metro, Johannesburg offers great property options and buyers who do their research can sometimes buy for far less than what it would cost to rebuild a property."
The repo rate, which remains unchanged at 8.25%, is also driving up demand for rental properties, particularly in an affordable city like Johannesburg. "The rentals are relative to the market prices of properties, so in turn they have also dropped," shares Savage. "However, in the past six months, the rental market has been getting stronger, as more people choose to rent instead of buying. They are showing caution in the belief the market hasn't finished dropping.
Pocket-friendly properties on offer
Johannesburg remains South Africa's economic hub, with the largest urban economy in the country. The city continues to attract residents in search of employment opportunities, but also sunny weather, world-class amenities, and most importantly, reasonably priced housing.
According to Savage, buyers are drawn to cluster and apartment homes under R5 million which fall within this price bracket. "The houses are also too risky an investment at the moment in these uncertain property times at the sellers' asking prices, so I would say 15% of the sales are houses as opposed to the other property types i.e. townhouses as well," he adds.
For R240,000, for example, a buyer can invest in this studio apartment in the historical precinct of Maboneng. The well-maintained property features biometric access and a large open living space, with a kitchenette perfect for whipping up meals. Going up the spiral stairs, there's a loft bedroom and bathroom boasting a shower, basin, and toilet. A young couple, retiree, or single working pleasure will appreciate being close to public transport and within walking distance of restaurants and nightlife.
Savage says those after rental properties are also opting for apartments and clusters for the safety factor rather than an unsecured house on which they can't improve security. For R6,000 per month, a tenant can enjoy this one-bedroom studio apartment in New Doornfontein. Centrally situated, secure, and load-shedding free, the apartment also delights with stunning views of the Johannesburg skyline.
Tips for buying or renting in Johannesburg
Savage believes both buyers and renters will find great value on the market. "If you have a long-term view, these prices present a good buy-to-let opportunity with the rental upswing. Investors should consider building their property portfolios in the north of Johannesburg as you can't go wrong with the prices and the value you get," he says.
Bryanston, Sunninghill, and Paulshof, for instance, are well-established suburbs, offering access to good schools, healthcare, shopping centres, restaurants, and entertainment facilities. With potential rate cuts on the horizon, buyers who can look ahead will reap the rewards when the market turns in these areas.
Renters looking to make the most of Johannesburg's affordable property market will find plenty of property types and price ranges available to meet their needs. "There's room to bargain a bit," encourages Savage. "You could also structure a rent-to-buy agreement at these low prices in case your circumstances change and the prices move upwards, as this would give you an immediate benefit."
Find your home with Century 21 Sandton
Finding a home within a specific budget can be a challenge. However, Savage believes the service of an experienced property practitioner can help tip the odds and ensure success. "At Century 21 Sandton, we have the friendliest and most knowledgeable real estate agents that go way beyond for all buyers, sellers, landlords, and tenants. They love the job and it shows when dealing with them," he says.
"Together with our patience and understanding of the market, we work longer and harder to achieve the most successful sale for sellers," he adds. "With our international footprint and more African buyers starting to drive the market here, we are busier than most when listing properties. You can't go wrong employing us as your property professional no matter what your needs are!"