January 2021 Property Index

Market Review

National house price inflation was 3.5% as at the end of January 2021. Contrary to expectations housing prices did not crash
during the year. In fact, the property market recovered as shown by the value bands except for the Low value market which has
seen some correction.

At this point it is difficult to point to the exact reason for the increase in the higher value segments and the decrease of the low
value segment. One reason for the growth in the higher value segments could be the exceptionally low interest rate increasing the
demand, whereas the low value segment which is more dependent on economic growth has taken a big hit from the currently
sluggish economy.


Provincial Inflation
The Lightstone Provincial Index tracks annual inflation of all provinces in South Africa.




Latest/Current Provincial Inflation Status



Municipal Inflation
The Lightstone Municipal Index tracks annual inflation at a municipal level, with coastal and inland based municipalities
reviewed independently.





Property Inflation: Free Hold vs Sectional









Property Inflation: Value Bands
The Lightstone Area Value Bands Index reviews inflationary rates for property based on the following values.
Luxury: > R1.5mil
High Value: R700k to R1.5mil
Mid Value: R250k to R700k
Low Value: <R250k









Inflation Table
The Annual Inflation Table (below) provides a long term view of annual rates of inflation for various geographical areas and
property types. Please note that historic inflation rates can change as transactions occur that imply price inflation for those
periods.




Shining A Light On Our Approach...

Methodology:
Lightstone applies the repeat sales methodology when reviewing and reporting on property data.
In contrast to 'average house price' indices, repeat sales indices provide a measure of the actual
price inflation of houses that have transacted twice within a particular period of time. The main
benefit of this is that it is less influenced by the mix of transacting properties. The repeat sales
methodology is recognised as the premier methodology for indexing house prices and is used by
many international residential property price indexers including the Office of Federal Housing
Enterprise Oversight (OFHEO) in the United States.

Data:
All property transactions in South Africa are registered in the Deeds Office and each record
contains the legal details of both the property and the transaction. For the purposes of the Repeat
Sales Index for residential properties, the following transactions have been excluded: farms; any
transactions which may be of a development, commercial or community services nature; new
developments; sales made in execution of a judgement; non-arms-length transactions;
transactions where the inflation is extremely different to the norm of the statistical distribution of
inflation rates; and township transactions.

Caution:
Lightstone presents both annual and monthly inflation rates. Monthly inflation emphasises recent
market performance (i.e. month on month) and is more volatile than annual inflation trends.
Conclusions about the future trend of annual inflation, based on monthly inflationary rates, must
be made with caution.

Disclaimer:
The Lightstone Repeat Sales Index system applies advanced statistical methods to a
comprehensive property database - compiled from the Deeds Office, the Surveyor General and
other sources - to generate repeat sales inflation data for individual residential properties. Despite
the statistical and actuarial rigour applied, Lightstone cannot guarantee the accuracy and
reliability of the data. Furthermore, the index is a statistical tool and does not amount to advice
and may not be applicable in some cases. Lightstone does not take responsibility for any losses
incurred as a result of any person acting or omitting to act as a result of the publication of this
index.

Queries:
Should you have any queries, please do not hesitate to email us info@lightstone.co.za or give us a call on 0860 106 389