The Eastern Cape prevails as the top contender, in terms of property price growth, among the major regions in South Africa’s residential property market. The region continues to show robust annual growth in housing prices – peaking at +7.01% in 2022 (January to October) – up from +6.35% in 2020 and +6.76% in 2021.
Rhys Dyer, CEO of ooba Home Loans elaborates: “While the Western Cape has proved to be a popular choice for both semigrants and international investors alike, the Eastern Cape continues to outperform all other major regions in terms of property price growth.”
| Province | 2020 | 2021 | 2022 (Jan – Oct) |
| Eastern Cape | + 6.35 | + 6.76 | + 7.01 |
| Western Cape | + 6.35 | + 6.50 | + 3.17 |
| KwaZulu-Natal | + 4.08 | + 5.25 | + 4.49 |
| Gauteng | + 2.93 | + 4.52 | + 3.17 |
The average annual growth in house prices. Source: Lightstone
Looking to the key metros, Lightstone’s data from January – October 2022 depicts a healthy 7.8% house price inflation in Gqerberha, in comparison to major metros Johannesburg at 1.8% and Cape Town at 4.0%.
Dyer explains that the average purchase price for homes in the Eastern Cape has increased gradually over the past decade. “According to ooba Home Loans’ data, the average purchase price in the Eastern Cape rose to R1.73 million in December 2022 – just R78 725 below the average price in the Western Cape. First-time buyers in the province paid an average purchase price of R1.14 million in February – matching the national average price paid by first-time buyers.”
Looking to vacant plots for development, Lightstone indicates that the price of vacant plots more than doubled between 2013 and 2022. This figure is expected to gain further ground this year, reaching a median sales price of R0.54 million in early-2023.
So, why the demand?
The Eastern Cape is home to popular areas such as Gqerberha, East London, Stormsriver, King Williams Town, Cintsa, St Francis Bay and Hogsback, to name a few. “The agriculture, renewable energy and automotive sectors are big drivers of the Eastern Cape economy, and the region recorded an employment increase of 20 000 jobs over Q4 ’22 as per the Quarterly Labour Force Survey,” continues Dyer. “In Gqeberha, the average household income ranges between R44 000 – R57 500.”
Dyer believes that, despite persistent difficulties with water shortages and general service delivery in the Eastern Cape, homebuyers are enticed by the idea of affordable, coastal living. “The homebuying frenzy can be largely attributed to three key factors: 1) homebuyers enjoying ‘more bang for their buck’, 2) further demand for holiday homes in the region and 3) a wave of young adults, most of which are first-time homebuyers, early career professionals and young families, coming into the region. Not forgetting the recent increase in demand for homes from retirees (65-plus), mature (50 – 64) and middle-aged (ages 36 – 49) homebuyers.”
Sectional title vs freehold homes in the Eastern Cape
While the majority of the market comprises freehold homes (72.5%), the demand for sectional title homes is also on the up. In fact, over the past two years, more sectional title homes have been sold than freehold units.
“The shift towards sectional title properties can be attributed to a host of new developments coming to market and/or the influx of young or first-time buyers who typically purchase a sectional title home for security, affordability and maintenance reasons.”