It’s a great time to buy property, particularly in areas where the market has been flat, with prices remaining stable.
Following three consecutive interest rate cuts, now is an opportune time, according to Samuel Seeff, chairman of the Seeff Property Group.
Although more rate cuts may follow, agents advise that buyers should act sooner rather than later. As sales volumes increase, price rises could quickly follow suit.
The recent rate cuts have provided consumers with much-needed relief, reducing debt repayments and freeing up disposable income for home purchases.
Lower interest rates make homeownership more affordable, allowing buyers to potentially borrow more at a reduced cost compared to a year ago.
Outside the Western Cape, property prices have remained relatively flat over the last two years, especially in Gauteng and other inland provinces. As a result, buyers can find properties at nearly the same price as two years ago, the estate agency said.
Additionally, many areas have high stock levels due to slower sales, giving buyers a wider selection and possibly more negotiating power.
The ideal scenario for buyers is to purchase property during the bottom of the cycle, when prices are lower.
This provides an opportunity to buy at a good price, and once the market recovers, buyers can benefit from property value growth as demand and competition drive prices up.
For sellers, increased demand means more opportunities to sell as stock levels decrease. Once market momentum builds and inventory starts to thin, buyer competition could push prices higher.
With lower interest rates, real estate also becomes a more attractive investment compared to other options. The combination of reduced borrowing costs and potential for property value growth can yield higher returns.
The Free State and Northern Cape have led the recovery, outperforming other regions, with the Western Cape following closely in second place, showing a 35% year-on-year increase in home loans granted. Overall, five regions recorded double-digit growth over the past 12 months.
In January, the average home purchase price remained stable at R1.58 million compared to the fourth quarter of 2024, yet was 4% higher than in January 2024, driven by strong demand in the more affordable segments, according to BetterBond’s data.
BetterBond’s analysis of key residential property market indicators shows clear signs that the market has turned a corner, with improvements in key indicators.
BetterBond noted that first-time homebuyers faced a 7.3% increase in average home prices, reaching R1.34 million in January, with growth expected to continue due to the interest rate cuts.
However, the recovery has not been uniform across regions. Notably, the number of home loans granted has shown positive growth, following a sharp decline in 2023 due to restrictive monetary policy.
The rise in homebuyer incomes by 8.7% has been key to stabilising the market.
“There is little doubt pent-up demand for home ownership exists at the more affordable segments of the market and the latest interest rate cut should provide further impetus to average home prices in the months ahead,” BetterBond said.
Mortgage originators, such as ooba, have reported a significant uptick in home loan applications after last year’s interest rate cuts, with further market momentum anticipated from the latest cut.
For sellers, high stock levels in certain areas mean they may face increased competition. Therefore, it is recommended that sellers seize favourable opportunities to sell while the market is gaining momentum. Waiting for a higher price could result in missed opportunities, said Seeff.
Though further interest rate cuts are possible, the Reserve Bank has cautioned that they are not guaranteed. “Waiting too long for a better offer or higher price might result in the seller losing out. There is also no guarantee that a higher price offer may be forthcoming,” said Seeff.
