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Pockets of opportunity in 2024 – property market trends

What can homeowners and homebuyers expect from the housing market in 2024, with geopolitical tensions and inflationary pressures that have kept rising as 2023 draws to a close?

Looking ahead to the new year, here are some of the top trends BetterBond will be keeping an eye on:

  1. Interest rates.Interest rate hikes have impacted consumers’ home loan affordability. Even if rates hold steady for a few months, before hopefully coming down early in 2024, it’s likely that home buying will remain subdued for a while. However, pockets of opportunity to meet buyers’ needs remain across the country. “BetterBond data shows that average home purchase prices have remained virtually unchanged year on year, so any positive shifts in interest rates could spark activity in the housing market,” says Bendall.
  2. First-time buyers.In 2024, this important buyer segment, will still be able to find some comparatively affordable options in new residential developments in the inland provinces of the Free State, Mpumalanga and Limpopo. “BetterBond data shows that, despite price increases, first-time buyers have managed to retain a share of more than 60% of all home loan applications for the past two years, and this positive statistic is likely to be carried forward into 2024,” says Bendall. The top three areas in terms of average home loan values granted to first-time buyers, over the past 12 months, have been the Western Cape, Greater Pretoria and Mpumalanga.
  3. Small towns.South Africa is famous for its charismatic small towns and many of these have become highly sought-after places to live since the pandemic, with more of us now able to do hybrid or remote work. “Small towns along the coast, formerly thought of solely as holiday destinations or retirement towns, have become desirable locations for primary residences. Here, we are thinking of places like Hermanus, Mossel Bay, Langebaan,” says Bendall. According to Lightstone, 26% of buyers semigrating in 2023 chose to settle in smaller towns for the laid-back lifestyles and superior service delivery on offer in these locations.
  4. Coastal living.Lightstone reports that the Western Cape remains the preferred destination for semigrants, with 59% of housing sales in the region attributed to buyers from Gauteng. According to StatsSA, just over 80% of the value of residential building plans passed in 2022 were for the Western Cape, KwaZulu-Natal and Gauteng. With its pristine beaches, natural beauty, efficient service delivery and quality of life, the Western Cape continues to attract buyers from inland provinces.

However, its fellow coastal provinces of the Eastern Cape and KwaZulu-Natal are also gaining popularity as semigration remains a major driver of the South African residential property market. The Eastern Cape recorded the second-highest house price growth year-on-year, according to the September 2023 BetterBond Property Brief, largely on the back of significant semigration. In the same month, KZN was the top-performing BetterBond region, suggesting that coastal living continues to drive home buying along the coast.

  1. Space for WFH.With hybrid work and work from home (WFH) becoming the norm in many sectors, we will continue to see demand for homes that have enough space for a home office. “In addition, we expect to see homeowners taking out more building loans in the new year, to renovate their existing homes to accommodate the work-from-home option, also increasing their property value in the process,” says Bendall.
  2. Mixed use, with a modern twist.The “live, work, play” value proposition is not new when it comes to residential property sales, but what we are seeing is the expansion of the mixed-use concept to encompass even more than before. Commercial buildings in central business precincts are being repurposed for residential use. In the Cape Town CBD, for example, the old Standard Bank building on Thibault Square has been converted into a space that now includes an aparthotel and Airbnb-style accommodation as well as a residential section. In Johannesburg, developers continue to buy the oversupply of office space and redevelop them for either residential or mixed use. In Sunninghill, for example, an office park has been converted into stylish designer-style apartments in a luxury development called The Apollo.

“We expect increased demand for this modern way of communal living where a property offers a sense of community to residents from many different backgrounds, and the convenience of an array of lifestyle options in a single location,” says Bendall. Westown in Durban is a residential precinct with lifestyle and recreational components. Residents can choose from a range of property options, and enjoy easy access to medical facilities and retail spaces.

  1. Collective buying.As economic challenges persist, expect to see more collective home buying. Many South Africans are already sharing homes and family responsibilities with parents or siblings sharing living spaces and household expenses. According to StatsSA data, in 2020 already, just over 45% of households were double generational – parents and children living together – while almost 15% housed three generations in one home.

Collective saving schemes, ‘stokvels’, offer an increasingly popular way to buy property. Some of South Africa’s big banks have launched collective buying home loans that allow up to 12 people to buy together, with each person contributing towards the monthly instalment. “While interest rates remain high, we expect to see more stokvel activity next year as South Africans continue to prioritise home buying as a way of securing their financial futures,” says Bendall.

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