House prices in Johannesburg have hit rock bottom

Johannesburg residential property is showing signs of recovery, indicating that it has hit the rock bottom of the cycle after a decade of sluggish growth. 

This is feedback from Jonathan Kohler, the founder and CEO of Landsdowne Property, who outlined some of the promising signs of recovery the company is seeing in Johannesburg. 

Property values in South Africa’s economic hub have lagged those in more attractive parts of the country as poor service delivery impacts demand. 

However, Lansdowne, one of South Africa’s largest residential real estate agencies and managers, said that this renewed activity presents a golden opportunity for investors and first-time buyers. 

With property prices at multi-year lows and rental demand holding strong, South Africa’s economic powerhouse is becoming an attractive destination for buyers looking to capitalise on opportunities. 

Property prices in Johannesburg have stagnated for over a decade, weighed down by concerns over infrastructure, safety, and semigration trends.

Residential property sales volumes in Cape Town edged ahead of Johannesburg in 2021 and have outsold South Africa’s economic capital since then.

Lightstone data recently revealed that Cape Town’s property market is outperforming Joburg’s in terms of both sales price and volume. 

In 2024, the value of property sales in Cape Town was just over R81 billion, up from nearly R74 billion in 2021, while in Johannesburg, it fell to just over R47 billion from R59 billion in 2021.

Kohler explained that these same factors that suppressed growth have now created a market ripe for buyers seeking long-term value. 

“This means buyers and investors can secure properties at 2007 price levels – a rare opportunity for those seeking strong rental income or long-term capital appreciation.” 

Kohler said this is a clear indication that the city’s property market has hit rock bottom and is likely to experience an uptick in the coming years. 

While lifestyle estates remain popular due to their security appeal, freehold homes in well-located suburbs are emerging as attractive alternatives.

Joburg property on the rise

Johannesburg’s property market is increasingly attractive due to its elevated rental yields and affordability, which are set to drive demand and push valuations higher. 

Despite its reputation as a challenging market, Kohler said Johannesburg continues to deliver some of the highest rental yields in the country. 

Investors in well-placed properties can expect net rental returns of around 9%, with certain high-demand areas surpassing 10%. 

“Suburbs like Braamfontein and Newtown consistently achieve yields above 10%, driven by demand from students and young professionals,” Kohler said. 

Other thriving rental hotspots include Paulshof, Sunninghill, Randburg, Fourways, and Midrand, where strong tenant demand ensures stable rental income for landlords.

Fourways is a clear example of value in a down cycle, with one-bedroom apartments in established estates starting at around R600,000, with rental yields of between 9% and 11%. 

By contrast, Blouberg in Cape Town offers a very different picture. A similar one-bedroom apartment starts at about R1.4 million, with rental yields typically lower, between 5% and 7%. 

“While Cape Town may promise coastal charm and long-term capital growth, Fourways shows where the smart money might go in a cooling market – solid returns at a lower cost of entry,” Kohler said.

Compared to Cape Town and other metros, Johannesburg offers significantly more affordable property options, making it one of the best places for entry-level buyers to secure a foothold in the market.

“Many areas still offer incredible value, particularly where infrastructure developments are set to enhance livability,” Kohler said.

Johannesburg’s residential sector has struggled with weak capital appreciation in recent years, but early signs of recovery suggest a shift could be underway.

Kohler cautioned that certain suburbs are already seeing modest price growth, and with interest rates projected to decrease, a surge in market activity should be anticipated. 

Another key driver of Johannesburg’s market resurgence is the growing preference for secure, low-maintenance living in sectional title complexes. 

The “lock-up-and-go” lifestyle has strengthened demand for townhouses and apartments in key urban nodes.

“Security and convenience remain top priorities, leading to steady demand in areas with strong transport links, reputable schools, and access to business hubs.”

With rental demand outpacing supply in many parts of the city, competitive purchase prices, and the first indications of a recovery in over a decade, Johannesburg’s property market may be entering a new cycle.

“This isn’t about chasing hype – it’s about recognising value. And right now, Johannesburg offers exactly that,” Kohler said.