What to Know About the Real Estate Market in Johannesburg
Joburg is South Africa's largest city and, as a hub of economic activity, the city is known for being the place to live if you're a young professional or active businessperson. In addition to the working opportunities in the city, it's got a lot to offer in terms of culture, sport, shopping, and entertainment, making it a great place for anyone to live.
The post-COVID world also has people moving back to the cities, with experts predicting that many of those who moved to the coastal provinces during lockdown will be migrating back to Johannesburg in 2023. That makes this year an interesting time for the property market in the city. This article will give you an overview of the property market in Johannesburg, along with some key things to know about selling properties in the city.
An Overview of the Real Estate Market in Johannesburg
Towards the end of 2022, housing prices in Gauteng skyrocketed, with lower-priced areas seeing the highest growth in prices. However, 2023 has seen a decline in the average selling price for homes in the city. More importantly, there's a large disparity between the asking and selling prices for properties in Joburg in 2023, with an average asking price of R1.49 million and an average selling price of only R850 thousand in the city. In contrast, the average selling price in 2022 was R1million compared to an average asking price of R1,29 million.
It's important to remember that it's early in the year, so these numbers aren't a good reflection on the state of the market as a whole. Instead, what the numbers are telling us is that lower-value properties in Johannesburg are selling better than higher-valued properties. This is a trend common to the country as a whole and is one that will likely continue into the rest of 2023, as increasing cost of living places pressure on South Africans' incomes.
First-time Homeowners are Impacting the Real Estate Market in Johannesburg
The popularity of lower-value homes is likely also driven by the people who are buying in the city: most buyers in Johannesburg are young adults between the ages of 18 and 35 who are buying their first home. While the bulk of homes on the market are larger properties, these young buyers are often more interested in 1 and 2 bedroom properties that are more affordable. As an agent, you should be honest with sellers about what they can expect if they are selling larger properties: the current market means that these properties will likely take longer to sell, or the selling price will be lower than expected.
Johannesburg Suburbs with Strong Real Estate Markets
While Johannesburg's Northern suburbs have typically been the most popular places to live in the city, the Eastern part of the city has been growing in popularity since 2022. East Johannesburg has a wide variety of property types that suit almost any budget, while also being well-positioned for easy access to most of the city's business hubs, as well as the airport. So far, in 2023, several of these suburbs have seen average selling prices being higher than average asking prices. With an influx of first-time homeowners in these areas, alongside those who are looking to move to newer suburbs, Eastern Johannesburg offers great opportunities for real estate agents who are able to price homes accurately and who know how to match the right buyers to the right properties.
Summary
While the Johannesburg property market has seen some significant changes in recent years, there are still great opportunities for real estate agents looking to make a living in this city. Focusing on lower-value homes, first-time homeowners and the Eastern suburbs of the city are good strategies for any estate agent in the city.
