As the South African residential property market strengthens, sectional homes are beginning to lose ground compared to freehold homes.
According to the latest Housing Price Index from Statistics South Africa, the annual growth rate for apartments and townhouses was 6.2% in February, while for freehold homes, this figure reached 9.7%. Overall, inflation in housing prices across the country accelerated by 0.9 percentage points, reaching 7.7% in February.
The Western Cape province contributed the most to the price increase, with an annual growth of 11.3%, which is 6.8 percentage points higher than Gauteng, the second largest driver of housing price growth in the country.
Samuel Seeff, Chairman of Seeff Property Group, advised financially prepared buyers not to delay purchasing a home, as property prices generally rise over time. He emphasized that buying one's own home is the best decision, and the sooner it happens, the better.
Seeff added that property values tend to increase annually, so the longer someone waits, the more they are likely to have to pay. He also noted that homeownership allows for capital accumulation, as every monthly mortgage payment increases the owner's stake in the property, unlike paying rent to a landlord. This accumulated capital can subsequently be used to reduce a mortgage on a larger home or accessed during a financial crisis, although he cautioned against using these funds for lifestyle expenses.
However, Seeff warned potential buyers not to purchase property until they have secured their financial stability, as selling property takes time in case of financial difficulties. He recommended that first-time buyers carefully plan their finances and maintain a good credit history, preferably with a credit score of 650 or higher.
According to Seeff, a buyer of a R800,000 property would require a gross monthly income of about R27,000, while a home costing R1.2 million requires an income of approximately R40,000 per month. Banks also assess income stability, existing debt obligations, and monthly living expenses when reviewing mortgage applications. As Seeff noted, the minimum requirement is usually permanent employment with three months of tenure, whereas self-employed applicants face stricter lending criteria.
Seeff also mentioned that buyers can improve their affordability by purchasing a home jointly with a partner. In addition to the purchase price itself, buyers must budget for registration and transfer fees, including stamp duty on the portion of the purchase price exceeding the current exemption threshold of R1.21 million.
A homeowner's budget must also include recurring costs such as municipal rates and taxes, sectional title levies, insurance, and maintenance. Although many first-time buyers may qualify for a 100% mortgage, Seeff stated that some more expensive purchases may still require a deposit.
During the actual sales period, which lasts about three months—from making an offer to transferring ownership—buyers should avoid taking on new debts or opening retail accounts. This is because banks typically conduct a final credit check before registration and may withdraw the mortgage if the buyer's financial profile deteriorates.
