Tshwane leads Gauteng metros in house price growth

The city of Tshwane has experienced the highest growth in residential property prices among Gauteng’s major metro areas.

Though the metro’s average home price remains below that of the Western Cape, it has become the most expensive housing market in the province.

According to Ooba Home Loans regional data, Tshwane recorded the highest annual house price growth in January and February 2025, with a 10.6% increase. Limpopo followed with an 8.1% rise, while KwaZulu-Natal saw a 6.1% increase.

Despite these notable gains, the Western Cape continues to lead in terms of average property prices. Though the region experienced a more modest growth of 3.9%, it still holds the highest average purchase price of R2.36m — well above the national average of R1.66m. 

“The Western Cape continues to benefit from an influx of ‘semigrants’, particularly around the City of Cape Town, the West Coast and the Garden Route. This has led to a growing share of national residential building plans, but demand has outpaced supply, driving price growth,” said Ooba Home Loans research economist Sandra Gordon.

Gordon cited a Stats SA report from earlier this month that shows national residential property prices rose by an average of 4.9% year on year in November 2024 — up from a revised 4.8% in October — marking the biggest growth rate since mid-2022.

Main contributors to the increase were the Western Cape, which added 3.1 percentage points to the total, and Gauteng, with 0.8 percentage points.

“By late 2024, Cape Town and Tshwane were the only two metro markets where house price growth outpaced the prevailing inflation rate,” Gordon said.

While investor demand played a small role in driving national house price growth — accounting for just 12.7% of average applications in the first two months of 2025 — it had a much greater impact in the Western Cape.

According to Ooba Home Loans, 32% of all applications in the province during January and February came from investors.

Gordon noted that first-time homebuyer applications have climbed from 43.3% in mid-2024 to 46% in January/February 2025, indicating a gradual but steady rise in demand.

“First-time buyer demand has shown signs of recovery since mid-2024, supported by easing price pressures and initial interest rate cuts.

“However, recent economic uncertainty — driven by the VAT hike dispute, a pause in rate cuts and weak economic growth in the first quarter of 2025 — has temporarily slowed momentum,” she said.

She said that once the economic backdrop became more supportive, with lower interest rates and stronger growth, the recovery in first-time buyer demand is expected to pick up again.

Meanwhile, the increasingly competitive banking sector continues to provide additional support, maintaining activity in this segment.

majavun@businesslive.co.za