Goodbye Johannesburg – South Africans are rushing to buy these homes

Cape Town’s property market remains more resilient than Johannesburg’s, with homes selling faster and closer to listing prices.

Data from Lightstone tracked four important variables in the real estate market: Time on market, listing price, selling price, and growth in listing and selling prices.

Lighstone explained that collectively, these variables tell a story of the health, or otherwise, of the residential market.

Time on market and listing price data used in this report come from data that represent approximately half of all residential sales, while the selling price data is from Deeds Office records.

Importantly, Lightstone did not consider the growth of house prices in this report.

Lightstone analysed the days between the listing and sale of property from 2015 to 2023, and perhaps the most immediate observation is that the gap between the City of Cape Town and the City of Johannesburg was widening again in 2023.

“The data continues to highlight Cape Town’s resilience in the property market,” said Hayley Ivins-Downes, Lightstone’s Managing Executive of its Real Estate Cluster.

“Despite economic headwinds, the city has consistently outperformed Johannesburg in terms of time on the market, reinforcing its appeal to buyers.”

Load-shedding, SOE failures and poor economic activity negatively disrupted the property market in 2019, when time on the market was the highest in the period under review at between 110 and 120 days.

The norm in the years 2017 to 2018 and 2020 to 2022 had been around 60 to 80 days for Cape Town and between 70 to 90 days for Johannesburg.

By the end of 2023, though, Johannesburg was nudging 100 days while Cape Town was dropping below 80. The national average was 90 days.

The data continues to signal the market’s strength in favour of Cape Town (and the Western Cape) over Johannesburg (and Gauteng).

The graphs below compare the days on market in the City of Cape Town and Johannesburg.

“Our analysis shows that market timing plays a crucial role in securing a quick sale at a desirable price point,” Ivins-Downes said.

“The beginning of the year tends to favour sellers, whereas later months often see properties staying on the market for longer.”

Houses listed in January spent just 75 days on average on the market in the years 2015-2023.

January listings also had the best chance of achieving the listing price at 85%. On average, a property listed at R2 million sold for R1.7 million.

The next best month for both the least time on the market and achieving the listing price was July.

While January and July listings get the best price to asking price ratio, houses listed in November and December spend most time on the market at nearly 90 days.

Of the four cities Lightstone evaluated, listed houses spent the least time on the market in Nelson Mandela Bay and the most in Johannesburg, sandwiching Cape Town and Buffalo City.

While time on the market differed across the four cities, the pattern was largely the same, with January listings spending less time on the market, while November and December were at the high end.

Houses listed in Nelson Mandela Bay in January took just 55 days to sell, compared to 59 in Buffalo City, 65 in Cape Town, and 80 in Johannesburg, where listing a house in April could shave a day off the time on the market!

Approximately 63% of houses which were sold in 2024 achieved 90% or more of their listed price, while 7% were bought at below 75% of the asking price.

“Nearly 60% of houses on the market in 2024 sold within three months of being listed – with nearly 30% of houses sold within a month, 17% within two months and 13% in three months,” Ivins-Downes noted.

“However, while this indicates a fairly active market, achieving the listed price is not guaranteed, as around 7% of sales closed at less than 75% of the asking price.”

Time on market within a city is also a variable which changes from suburb to suburb.

Lightstone looked at time on market in Cape Town over 2024, and it offers interesting insights.

Fish Hoek and Muizenberg are near neighbours along the False Bay coast, yet the time it took, on average, to sell a house in each of the suburbs in 2024 was worlds apart.

Houses in Fish Hoek took just under 53 days on the market to sell, while sellers in nearby Muizenberg took just over 100 days.

Despite the difference, though, both suburbs recorded sales close to the listing price, with Fish Hoek at 93%, and Muizenberg at 94%.