South Africa’s richest province has historically low property prices

Johannesburg and Gauteng metros currently offer exceptional value for property buyers and investors, with historically low prices, high rental yields, and far more space for the cost compared to Cape Town.

Seeff Property Group chairman Samuel Seeff said buyers should take advantage of interest rate savings and the opportunity to invest, since this rare window of opportunity is unlikely to last as the market rebounds.

“You can find unbelievable value, even in the luxury areas where you can find mansions for under R10 million to R15 million,” Seeff said.

While the market is picking up, it remains sluggish, primarily due to poor infrastructure maintenance and management. However, this will not always be the case.

“Years of low growth are well reflected in the property transactions. Lightstone data shows that Joburg’s property transactions are down by over 30% in some areas,” Seeff explained.

“It has lost significant property value over the last few years, with negative property value growth of 1.3%, the weakest of the metros, and notably below Cape Town’s 6% growth. The average property price has remained static at around R1.3 million.”

According to Payprop, Gauteng’s rental growth was below average every quarter of 2024, finishing the year at 3.4%.

In Q1 2025, it declined further to 2.9%. This was the second lowest in South Africa, after Mpumalanga, which grew at 1.1%. In comparison, the province with the highest rental growth, the North West, grew 13.5% during the quarter.

“The star power of Joburg is undeniable,” Seeff said. “It is the financial and economic heart and engine of South Africa, and the wealthiest city on the continent.”

“It is home to the JSE, the largest and most sophisticated stock market in Africa, and home to major banks and financial head offices, legal firms, and consultancies.”

Johannesburg is also the preferred headquarters for most leading corporations, with over 70% of the country’s companies based there.

“The city’s economic output is staggering, contributing almost 16% to South Africa’s total GDP and a remarkable 40% to the economy of Gauteng, the wealthiest province,” he said.

According to New World Wealth, Gauteng also has the largest concentration of wealth, with nearly 15,000 dollar-millionaires.

A limited-time opportunity

Seeff questioned why, given all the wealth found in Johannesburg, its property market would be performing below average.

“That property market should be pumping”, Seeff said. “Instead, the market is lagging at the bottom of the cycle, offering exceptional value for money, which may not be repeated down the line.”

“Right now, the cost to build is significantly higher than what you can buy for, and buyers and investors should take advantage.”

Seeff argued that, despite its current challenges, Johannesburg possesses enormous untapped potential. It is the most populous metro with the highest urbanisation rate, as people flock to Gauteng for economic opportunities.

This constant influx creates a robust demand for accommodation, including rentals, presenting potentially lucrative opportunities for investors. In fact, many areas offer above-average rental yields that surpass those in Cape Town.

“The reality is that Joburg is going nowhere, it will continue expanding, and there are tremendous opportunities to capitalise on,” Seeff said.

“Beyond its economic might, it is a great place to live, and one of the greenest metros with great weather and a vibrant cosmopolitan lifestyle.”

He pointed out that the province also has some of the best schools and tertiary institutions on the continent. According to Webometrics, the University of the Witwatersrand and the University of Johannesburg are ranked among the top five best universities in the country.

Problems can be fixed

One reason often attributed to Joburg’s lacklustre property market is the city’s severe infrastructure challenges, with service delivery lacking in many areas.

However, Seef argued that, even though the city’s infrastructure is deteriorating, there is a realisation that this needs to be addressed urgently.

“The problems of Johannesburg and the Gauteng metros are man-made and they demand man-made solutions,” Seeff said.

“It is vital for South Africa’s economic resurgence that these issues are decisively addressed and resolved, especially with significant international gatherings like the G20 on the horizon.”

Beyond that, Seeff said that residents and ratepayers need to get involved instead of waiting for someone else to solve the problems.

A significant portion of the Cape Town renaissance from 2008 onwards was driven by businesses and private residents who funded local initiatives aimed at improving safety and cleanliness.

“Investors with vision came in and started developing and modernising the CBD and its surroundings. Today, it is delivering tremendous value to property investors, both corporate and private,” he said.

Seeff said there is exceptional affordability in many Johannesburg suburbs with pricing below R1 million to R1.5 million.

He said Buyers can also purchase significantly more on a square metre basis in the R3 million to R5 million plus price bands compared to Cape Town.

“Even in the luxury enclaves, magnificent properties can be acquired for R10 million to R15 million, a scenario that is unlikely to persist indefinitely,” he said.

“This affordability, coupled with favourable lending conditions and recent interest rate cuts – now a full 1% lower than a year ago – offers the ideal opportunity.”