Value of residential property sales in South African townships have risen

The average value of registered residential property sales in five major South African townships has risen over the past decade.

Lightstone, which provides information, valuations and market intelligence on properties in South Africa, analysed residential market indicators in the five randomly picked townships to provide a snapshot of home ownership patterns from 2013 to 2023.

Three Gauteng townships — Mamelodi, Thembisa and Soshanguve — as well as Umlazi in KwaZulu-Natal and Khayelitsha in the Western Cape were analysed.

“The increase in average value of registrations has been most pronounced in Thembisa, moving from R284,217 in 2013 to R717,169 in 2023, and Mamelodi, which went from R232,972 in 2013 to R687,469 in 2022, marginally higher than the average recorded in 2023.”

Lightstone also found the average value of registrations in Khayelitsha and Umlazi have risen consistently over the ten years, but Soshanguve has seen a fall in 2023 to R180,777 from a high of R472,362 in 2022.

“While the average value of registrations has been flattest in Soshanguve, registration volumes have outstripped the other townships every year over the past decade.”

Khayelitsha has been consistently on the low side in terms of new property registrations, while Umlazi and Thembisa have seen activity levels increase in 2021 and 2022 after a ten-year low in 2020.

“Thembisa emerged top in terms of Lightstone’s estimated average value of each property.” 

The township’s 34,071 properties are valued at R610,420 on average, compared to R515,726 in Umlazi (37,568 properties), Mamelodi (R457,533 average value for 41,643 properties), Soshanguve (R357,108 average value for 78,867 properties) and Khayelitsha (R336,765 average value for 47,795 properties).

The average household income is highest in Umlazi at between R11,000 and R22,000 a month compared to an average of R5,500 and R11,000 a month in the other four townships.

Soshanguve has the most number of resident adults at 430,641, followed by Thembisa with 329,517 and Mamelodi at 327,903.

Most homeowners have had tenure for more than 11 years.

In Umlazi, more than 85% have been in the same home for longer than 11 years, while Soshanguve is the lowest at around 63%.

Soshanguve is also the place with the highest percentage of relatively new homeowners (less than five years).

Recent buyers have mostly been middle-aged, while Soshanguve had a relatively high percentage of mature buyers. 

“Homeowner stability is most pronounced in all the townships surveyed in the mature and pensioner age categories with Umlazi being the exception where the most stable owners are in the younger age groups. 

“Recent sellers in Khayelitsha and Soshanguve tend to be young, while Thembisa and Mamelodi sellers tend to be of mature and pensioner age groups respectively,” said Lightstone.

Lightstone also looked at the behaviour of first-time homeowners in South Africa.

It found those owning property for the first time enter the market later — and stay put for many years.

“Of South Africa’s approximately seven million residential properties, 5.9 million are owned by natural persons (as opposed to 1.1 million being owned by legal entities). 

“Of these properties, 69% are owned by one person, 30% by two people and 1% have more than two owners.”

Lightstone data shows that 68% — just more than four million — of the 5.9 million residential properties registered at the deeds office are owned by first-time owners, which includes first-time buyers and recipients of RDP/subsidised houses.

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