Daily Archives: May 6, 2025

Eskom delivers winter load shedding forecast

Eskom says it is working to prevent load shedding this winter, citing improved operational performance and the anticipated addition of new generation capacity to the grid.

For load shedding to be avoided, unplanned outages must remain below 13 gigawatts (GW).

“If outages increase to 15GW, load shedding would be limited to a maximum of 21 days out of 153 days at stage 2 – an improvement over the prior winter’s worst-case prediction of stage 5 load shedding,” Eskom Group chief executive, Dan Marokane, said on Monday.

Addressing a media briefing on Eskom’s State of the System for the 2024/2025 financial year, Marokane said the improved winter outlook is due to a 3.1GW decrease in unplanned outages compared to the previous year. 

As a result, the forecast range has been lowered to 13-15GW, down from 14 -17GW in winter 2024. 

Last winter had no load shedding, with average unplanned outages at 12.3GW – significantly below the winter 2024 base-case projection of 14GW.

“This year’s winter outlook prediction is built on an improvement in operational performance and overall efficiency. Load shedding was the lowest in Eskom’s last financial year (FY) 2025 than in the previous two years. 

“In FY 2025, we delivered power 96% of the time. In the previous year, the figure was just 9.9%. Our diesel open cycle gas turbines (OCGTs) were utilised approximately 50% less in FY 2025 compared to the two previous financial years, saving around R16 billion,” the CEO said.

Against this progress, Eskom has seen some setbacks in operational excellence, as evidenced by the recent load shedding requirements between January to April 2025. 

“A targeted plan has been put in place to reinforce operational discipline and accelerate recovery initiatives to address the root causes related to the recent load shedding events,” Marokane said.

Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, said Koeberg unit 1 has received the long-term operating go-ahead from the regulator to ensure 20 years of additional life. 

“We have been able to restore Kusile unit 2 and 3. Kusile unit 1 will be placed back in its original form before the end of May. The three units at Kusile will give us [additional] megawatts (MW) during the winter period.

“Kusile unit 6 has been synchronised to the grid. It is yet to be in commercial operation. It is a technical issue. It is [providing electricity] and at times, it must be taken out to be fixed. Once it gets into commercial operation, we will get the long-term benefits of the unit.

“We plan to bring back Medupi unit 4 back to service during winter. It has been out of service for about four years. We are expecting to get about 800MW in the middle of winter,” Ramokgopa said.

The minister said load reduction will remain in place to protect the equipment and as a safety precaution to protect the lives of those who are close to the infrastructure when it gets overloaded due to rampant illegal connections.

From 1 April 2024 – 31 March 2025, Eskom implemented load shedding for 13 days compared to 329 and 208 in the two previous years, respectively.

Marokane said Eskom supplied South Africa with more electricity and reduced load shedding without the extensive use of diesel during the period under review.

“We had a 45% reduction in diesel consumption against the backdrop of the highest send out in the last three years and the lowest load shedding days.

“We used the OCGTs very tactically to support the high vulnerability and once we have our capacity, you will see the diesel expenditure going down significantly,” he said.

According to Eskom Group executive for Generation, Bheki Nxumalo, Eskom has continued to maintain high levels of planned maintenance as part of efforts to improve fleet reliability in preparation for the high winter demand, while also meeting environmental licence conditions and regulatory requirements.

“We have evolved our Generation Recovery Plan to ensure our data-led analysis into the delays in returning units from outages on time, which has caused our fleet to be constrained and not able to accommodate a sudden loss of units, receives intense management focus, as we use our ‘high challenge, high support’ culture to support our teams to rectify this situation,” Nxumalo said.

Electricity wheeling changes for South Africa

The updated Regulatory Rules on Network Charges for Third-Party Transportation of Energy have been released by the Department of Electricity and Energy.

The updated rules, also referred to as the electricity wheeling framework, were revealed by minister Kgosientsho Ramokgopa during a media briefing on Tuesday.

Wheeling refers to the transmission of electricity from a private generator to an end-user via existing transmission or distribution infrastructure. It enables businesses or municipalities to buy power directly from independent producers, using the national grid to deliver it—reducing reliance on Eskom and supporting energy diversification.

The minister touted the move as the “most consequential intervention” in South Africa’s electricity sector.

“It’s going to help us remake the energy and electricity landscape in the country and…bring into life what was envisaged in the Energy Action Plan that the President enacted in July 2022.

“It’s also consistent with our objective of ensuring that we are able to achieve energy security in the country. We are able to diversify generation sources and we don’t only rely on Eskom for electricity generation in the country,” he said. 

Conditions for third-party participation include:

  • Participants must be licensed and registered with the National Energy Regulator of South Africa (NERSA);
  • Power purchase agreements, connection and use-of-system agreements must be appropriately concluded;
  • Grid code compliance and auditable metering required.

Open access

The updated wheeling framework is aimed at supporting open access to the electricity network which will allow consumers to choose power sources – enabling competition and lowered electricity prices.

The rules are also aimed at: 

  • Non-discriminatory access: Ensuring equal access to the grid for all users.
  • Cost reflective tariffs: Charges to reflect the actual cost of network use.
  • Fairness and equity: Balance the interests of customers and licensees with non-biased tariffs.
  • Transparency: Promote unbundled tariffs that show true costs, subsidies and levies.
  • Network reliability: Maintain the integrity of the security of the grid during wheeling.
  • Standardisation: Create consistent processes across all network service providers.
  • Regulatory certainty: Reinforce NERSA’s role in governing fair and transparent access.
  • Just Energy Transition: Enable access to renewable energy through wheeling.

The minister said this brings the reforms announced by the president to life.

“…We are democratising this space. We are not just relying on Eskom as a sole generator of electricity, there will be multiple generators of electricity. And with competition comes efficiency, comes innovation, research and investment, and we are likely going to drive the prices down. 

“That’s why when we talk about affordable electricity, these are part of the elements [and] the components that are going to make it possible for us to make energy affordable for everyone, including the poor and downtrodden and those that are in villages, those are who are in peri-urban areas,” Ramokgopa said.

Energy Action Plan

The EAP was announced by President Cyril Ramaphosa in July 2022 and is coordinated by the National Energy Crisis Committee (NECOM) under the leadership of the Minister.

The plan aims to reduce the severity and frequency of load shedding in the short term and achieve energy security in the long term through five key interventions:

  1. Fix Eskom and improve the availability of existing supply
  2. Enable and accelerate private investment in generation capacity
  3. Fast-track the procurement of new generation capacity from renewables, gas and battery storage
  4. Unleash businesses and households to invest in rooftop solar
  5. Fundamentally transform the electricity sector to achieve long-term energy security

The cost to build vs buying a house in South Africa in 2025

As house prices cool and construction costs rise, South Africans looking to enter the property market in 2025 face a complex question: is it cheaper- and wiser- to buy an existing home or build one from the ground up?

While the dream of a custom-designed home remains strong, the financial and logistical hurdles of construction have grown steeper. At the same time, established homes offer faster access to sought-after neighbourhoods, but may come with hidden costs and dated features.

According to data from RE/MAX and Absa, the average price of a freehold property in South Africa is now R1.37 million, while sectional titles come in at just over R1 million.

In contrast, the cost of building a new home ranges from R6,500 to R25,000 per square metre, depending on materials, location, and specifications.

“Building a home can cost 20% to 30% more than buying one,” said property economist Elmarie Goosen. “But you’re paying for full control over the design, energy efficiency, and the future value of the property.”

For many buyers, existing homes in established suburbs offer a simpler route to homeownership. With amenities like schools, hospitals, and public transport already in place, and luxury add-ons like swimming pools or landscaped gardens often included, buying a home allows for a relatively swift transition.

A standard property transfer can take around three months. That’s far less than the time needed to complete a construction project, which may stretch for over a year.

However, pre-owned homes can bring surprises. Renovation costs, outdated insulation, and inefficient appliances can quickly erode savings.

And for some, living in a home that has hosted generations before them can feel less personal.

Building allows for modern designs, eco-friendly materials, and the latest in smart home technology. Crucially, there are no transfer duties on new builds.

Yet the risks are significant. The construction industry in South Africa has been hit by delays linked to labour shortages, material price spikes, and a lack of regulation enforcement.

According to the 2024 Turner & Townsend survey, average construction costs in Johannesburg now sit at R17,791/m², while Cape Town leads with R19,589/m².

The cost breakdown also goes beyond bricks and mortar. High-end kitchens can cost over R150,000, bathroom installations may reach R25,000, and professional fees—from architects to engineers—can account for 10–15% of the total build cost. Budgeting for the unexpected is essential.

While price is a leading factor, many buyers make their final decision based on lifestyle. Buying often means compromising on design but securing a convenient location.

Some developers are offering hybrid solutions—custom homes in pre-zoned estates, combining the ease of buying with the flexibility of design. These may grow in popularity as construction inflation continues to rise.

According to the latest industry data, buying an existing freehold home costs around R1.4 million, while the average cost of building a mid-range home now ranges between R10,000 and R15,000 per square metre, depending on location and finishes.

Moving service Wise Move highlights the costs:

Average Costs: Buying vs Building

CategoryEstimated Cost per m²Total Cost (100m²)Notes
Buying (avg.)R10,000 – R14,000R1,000,000 – R1,400,000Based on average home sale prices
Building (basic)R6,500 – R10,000R650,000 – R1,000,000Entry-level construction, limited features
Building (mid-range)R10,000 – R15,000R1,000,000 – R1,500,000Most common build costs in urban areas
Building (high-end)R15,000 – R25,000+R1,500,000 – R2,500,000+Luxury builds with premium finishes
SA Building Costs by Province (2025 Estimates)
ProvinceAvg. Build Cost per m²Estimated Total for 150m²
KwaZulu-NatalR16,700R2,505,000
GautengR15,000R2,250,000
Western CapeR14,800R2,220,000
Free StateR12,700R1,905,000
Eastern CapeR12,300R1,845,000
Northern CapeR11,800R1,770,000
MpumalangaR10,400R1,560,000
LimpopoR9,600R1,440,000
North WestR9,100R1,365,000
SA Building Costs by Home Size
Home Size (m²)Budget BuildMid-range BuildLuxury Build
50m²R350,000 – R450,000R550,000 – R650,000R1,000,000 – R1,250,000
100m²R650,000 – R850,000R1,000,000 – R1,250,000R2,000,000 – R2,450,000
150m²R950,000 – R1,250,000R1,550,000 – R1,800,000R3,000,000 – R3,600,000
200m²R1,250,000 – R1,650,000R2,000,000 – R2,450,000R4,000,000 – R4,800,000
According to Absa, building costs are generally 20–30% higher than buying a completed home.

When building, special costs quickly add up: architectural fees (up to 8%), engineers, legal costs, and a contingency budget (10–15%) for delays or design changes. Plumbing, electrical work, and even site preparation can be surprisingly costly, especially on tricky terrain.

Buyers, on the other hand, must prepare for transfer duties, bond registration fees, and potential renovation costs if the home requires updating.

Special & Hidden Costs When Building

ItemEstimated Cost / %
ArchitectUp to 8% of construction cost
Land SurveyorUp to 5%
Structural EngineerAround 2%
Quantity SurveyorUp to 4%
LawyerR900/hour average
Contingency Budget10–15% of total project cost
Swimming PoolR60,000 – R120,000
Kitchen (high-end)Up to R150,000
Bathroom (mid-high)R13,000 – R25,000
Cost of Common Materials
MaterialCost Range
Bricks (1000 units)R1,600 – R6,000
Roof Tiles (1000)R1,300 – R4,000
Concrete FoundationFrom R23,000 (100m² home)
Home TypeAverage Cost per m²Total Cost (100m²)
Buy (Existing)R10,000 – R14,000R1,000,000 – R1,400,000
Build (Basic)R6,500 – R10,000R650,000 – R1,000,000
Build (Mid-range)R10,000 – R15,000R1,000,000 – R1,500,000
Build (Luxury)R15,000 – R25,000R1,500,000 – R2,500,000+

Whether to build or buy in 2025 depends not only on your finances, but your goals, timeline, and tolerance for complexity. Buying may save you time and money in the short term. Building may give you the forever home you’ve envisioned—but only if you’re prepared for the journey.

South Africa’s real estate sector showing its teeth in 2025

2025 has begun with marked volatility, shaped by sharp market fluctuations, shifting geopolitical landscapes, and persistent macroeconomic pressures, notes Standard Bank.

The South African real estate sector has not been insulated from these broader dynamics, according to Simon Fiford, senior VP, Real Estate Coverage at Standard Bank.

“Often misunderstood and seen as a monolith, the sector comprises multiple, highly differentiated asset classes: office, retail, residential, industrial and alternative real estate assets-including data centres, cold storage facilities, and student accommodation, among others.”

Across these categories, performance has varied, stated Fiford. As the largest African bank by assets Standard Bank said that despite macroeconomic challenges, the real estate sector has shown notable resilience.

Beyond global pressures, the real estate market contends with persistently high interest rates, the lingering effects of the post COVID-19 recovery, and muted domestic growth in South Africa. These factors have impacted each asset class differently.

Office

Office rentals have shown surprising resilience. The national weighted decentralised vacancy rates for grades A+, A and B office space decreased to 12.6% in Q4 2024, down from 14.4% in Q4 2023.

The shift back to physical workplaces has gathered momentum, as hybrid fatigue sets in, and companies prioritise in-person collaboration.

Globally, firms such as Amazon, IBM, JP Morgan Chase, Tesla, Zoom, and Google have implemented return-to-office mandates.

“Locally, we’ve observed a similar trend: more businesses are encouraging employees to return to office environments, driven by benefits like faster onboarding of new hires, enhanced collaboration, more effective strategic planning and execution,” said Fiford.

Retail

The real estate expert said that the retail sector has experienced a remarkable recovery. “Footfall and occupancy rates have now surpassed pre-pandemic levels in several key African markets.”

The asset class is also seeing low vacancy rates (5.5% FY 2024), as well as increased adoption of solar PV initiatives which are being used to manage operational costs, he said.

Standard Bank recently issued a renewable bond with the aim of providing access to affordable sustainable funding for such projects, which ultimately relieve pressure on electricity grids.

“Furthermore, we have witnessed the rise of urban consolidation which has led to innovative precinct developments, which blend residential, retail, and cultural spaces in one environment,” said Fiford.

Residential

He said that the structural undersupply of affordable housing in the country remains a challenge. Citing the Centre for Affordable Housing Finance in Africa, Fiford noted that the total value of South Africa’s residential property market reached R6.9 trillion in 2024, encompassing 6.91 million properties.

Residential assets represent 89.3% of total property volume, underscoring their centrality to household wealth.

“Importantly, government-subsidised housing (GSH) makes up 32% of total residential units, or about 2.18 million homes. This indicates massive potential for scalable investment and impact.” Fiford said that Standard Bank continues to support clients like Calgro M3 with sustainable finance solutions to support developments such as the Bankenveld District project in Sandton.

“Encouragingly, the residential market is showing lower vacancy rates, increased investment in build-to-rent and build-to-sell developments, and a steady rise in rental yields.”

Industrial

The standout performer across the board continues to be the industrial sector. This asset class benefits from booming e-commerce, the reshoring of supply chains, and demand for warehousing solutions.

Vacancy rates have dropped by 2.1%, while rental growth has exceeded 5% year-on-year.

“We are also seeing a surge in tenant-driven developments and sale-and-leaseback structures, enabling manufacturers to remain focused and unlock capital to invest in core operations,” said Fiford.

Alternative Assets

Data centres, cold storage, and student accommodation continue to emerge as strategic sub-sectors, said Fiford.

Their rise speaks to shifts in technology, food logistics, and urbanisation, pointing to new investment opportunities, he said.

Relevance of Physical Real Estate

According to Standard Bank’s internal estimates, the South African commercial real estate sector is currently valued at approximately R1.9 trillion.

This represents a significant increase from the R1.3 trillion recorded in 2015, highlighting the sectors growth over the past decade. If we add to this the estimated value of the residential property market (R6.9 trillion) the market size exceeds R8.8 trillion (as of end of 2024).

Standard Bank stressed that these valuations may not fully capture the entire market, as certain segments like government-owned properties, hospitals, hotels, and multi-dwelling residential units might be underrepresented in municipal data.