South Africa's property market faces a pivotal time in the new year, shaped by a combination of global economic factors, local policies, and changing consumer preferences.
From interest rate shifts to growing uncertainty surrounding global economic policies, the year ahead holds both challenges and opportunities for property buyers, sellers, and investors.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, anticipates that “there will be slow and steady reductions in the repo rate throughout 2025 – probably roughly 1.25% down between now and Dec ’25. This will lead to an increased buyer pool from both first-time buyers as well as investors. It should also create some breathing room for existing homeowners with home loans.”
Additionally, Goslett predicts that the Western Cape will continue to offer reliable and stable returns, though at a higher entry price. He said: “There is value to be had in Gauteng and KZN over the next six months. Once interest rates come down and buyer demand rises, the chance for value home purchases may continue to exist for a while, but the availability of value-priced homes will diminish significantly as sellers expect higher offers as demand increases.”
When considering foreign buyers, Goslett suggests that South Africa remains significantly undervalued, presenting a “steal” for international investors.
“We have our challenges in this country for sure, but ultimately, SA is and will remain a great investment option for foreigners looking to have their cake and eat it – to live in Europe and the US earning euros and dollars and escape seasonally to enjoy that hard-earned money in a country that offers luxury at bargain prices,” he said.
Another influence likely to impact the real estate sector in the coming year is the rise of AI. “The catchphrase in all industries right now is AI and everyone is trying to figure out how this may affect their respective businesses. In real estate, you will find an increase in products and services entering the market using this technology – with all these companies scrambling to be the front runner in lead generation and lead management.”
“Inside that space, AI will have a role to play, but the core role of the agent will not be replaced by tech. Rather, nurtured client relationships and real-time local market knowledge is what clients need from their agent, and this cannot easily be replaced by technology,” he said.
Andrew Golding, chief executive of the Pam Golding Property group, notes that with inflation currently well below the lower end of the 3-6% target range at 2.85% in October 2024 and electricity supply under control, the outlook for 2025 appears promising. He foresees a further 25bps repo rate cut in January 2025.
"Although the Reserve Bank remains cautious in light of upside risks to the inflation outlook, the MPC is expected to reduce interest rates by a further 75bps in total next year (2025), retaining its cautious stance, with the timing of the cuts likely to be influenced by developments internationally such as the oil price, rand, and US trade tariffs, among others.”
Sentiment in general has improved, which, together with the two recent repo rate cuts of a cumulative 50bps in 2024, are already creating a ripple effect across the residential property market, he said.
Golding identified several key trends expected to persist into 2025, including:
Semigration to other provinces and coastal towns
Growing interest in sectional-title properties
Continued demand for estate living, especially in Gauteng
Increased popularity of mixed-use developments with convenient amenities
South Africans purchasing property overseas for both investment and leisure purposes
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