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Article Written by Kgati Mogashoa 02 April 2023.

Now valued at USD 16.54 billion, the South African residential real estate market is expected to grow at a CAGR of more than 10% over the next five years. The residential real estate business has developed into one of South Africa's more resilient industries, despite the concerns surrounding COVID-19 and the ensuing lockdowns.

According to statistics for the nation, 15.6 million South Africans are between the ages of 20 and 34. Many first-time buyers are joining the market as a result of favorable economic opportunities. Others who already own a home are learning about the potential for real estate to generate wealth. The good news for prospective investors is that interest rates are favorable and that the moderate rental growth that is currently occurring will probably get better over time. Low borrowing rates, the increase of work-from-home habits, and the allure of additional space during lockdowns are just a few of the causes that have fueled the housing market.

Slow labor market improvement and rising interest rates point to a less favorable medium-term environment for housing activity. The continuous changes in housing requirements, which have supported homeownership, could, however, lessen the effect if they continue. Depending on location, residential real estate in South Africa can cost up to 1.6 million South African rands on average. Cape Town, one of South Africa's three capital cities, is situated in the West Cape province and is the country's second-largest metropolitan after Johannesburg.

Even though Johannesburg's housing costs have decreased, they were still more than the one million South African Rand mark. Although prices differ widely depending on location and property type, most residential real estate transactions cost more than 1.2 million South African Rands. This was a little bit higher than the standard for mortgage loans to first-time homebuyers. The Western Cape had the highest rentals, but Mpumalanga had the biggest growth in the rental market.