South Africa’s residential property market is expected to stabilise in 2025, buoyed by gradual improvements in affordability and buyer confidence, according to at the Rawson Property Group.
The group’s David Jacobs predicts a shift towards well-supported areas with strong infrastructure.
“Buyers are becoming more discerning, focusing on long-term value in areas with reliable municipal services,” he said. “Gauteng’s growth potential is immense, but its full recovery depends on3-Jan-30-2025-09-25-44-9159-AM infrastructure improvements. Cape Town, meanwhile, continues to attract strong buyer interest.”
While 2024 saw sluggish house price growth – just 0.8% year-on-year, the slowest in 15 years – Jacobs expects modest recovery as interest rate cuts provide relief.
“This could be the year where affordability starts to align with opportunity, particularly for first-time buyers,” he said.
Connectivity remains a top priority for buyers, reflecting a continued demand for fibre-ready homes over features like dedicated home offices.
Jacobs also notes that reverse semigration from coastal areas to Gauteng could gain traction as inland affordability improves.
EasyProperties notes that after years of people leaving major metros for a more relaxed pace in coastal towns or the countryside, there’s a noticeable swing in the opposite direction.
Here’s why it’s gaining momentum:
–Career Opportunities and Economic Stability: While coastal towns offer a laid-back environment, they often lack the dense business networks and job prospects of Johannesburg or Pretoria. As South Africa navigates its economic landscape, many are seeking the stability and career growth major cities offer.
Joburg’s Back in Business: Renewed investor confidence in Gauteng, fueled by a stable government, shines a spotlight on Johannesburg’s enduring role as Africa’s financial hub.
-Essential Services and Infrastructure: Major cities like Joburg boast well-established healthcare, diverse education options, and robust retail infrastructure. These amenities are crucial for families, especially those with young children.
–Social Connection and Community: The allure of coastal living can fade when feelings of isolation arise. Cities offer a vibrant social scene and a sense of community that smaller towns sometimes lack.
–Affordability in Unexpected Places: The surge in coastal property prices due to semigration demand has made Johannesburg a more attractive option for some. Here, urban properties offer greater affordability compared to previously inflated coastal markets.
The rental market in 2025 is expected to grow steadily, driven by continued demand for affordable housing. Jacqui Savage, national rentals manager for the Rawson Property Group, sees a strong trend towards smaller units and shared housing solutions.
“Tenants are prioritising affordability, especially in light of rising living costs,” Savage said. “We’re seeing consistent demand for budget-friendly options in suburbs like Parow and Goodwood in Cape Town and Midrand in Gauteng.”
Western Cape remains the strongest rental performer, with vacancy rates as low as 1.07% and rental growth at 9.3% year-on-year. In contrast, Gauteng’s higher-end properties continue to face challenges with tenant retention.
Savage predicts rental price growth will moderate between 4 – 4.8% year-on-year, as inflation impacts tenant affordability. “Landlords who adapt to market demands with smaller, more affordable units will find success,” she advised.
The property finance landscape in 2025 will benefit from further anticipated interest rate cuts, making homeownership more accessible and reducing the financial burden on bondholders. Leonard Kondowe, national manager for Rawson Finance, encourages buyers to act strategically in this environment.
“Lower rates mean smaller monthly repayments, which could tip the scales for renters consideringLeonard-4 homeownership,” Kondowe said. “It’s also an excellent opportunity for existing bondholders to accelerate debt reduction.”
Despite this positive outlook, Kondowe emphasises the importance of financial preparation. “Saving for a deposit and getting prequalified remain crucial,” he advises. “A deposit not only improves your chances of approval but can also reduce your interest rate, creating significant long-term savings.”
The commercial property sector in 2025 will continue to evolve, with technology and adaptability leading the charge. Craig Mott, national business development manager for the Rawson Property Group, highlights key trends to watch.
Industrial and logistics properties remain the sector’s strongest performers, driven by sustained e-commerce growth. Gauteng and Cape Town lead the way in rental growth and low vacancy rates, reflecting robust demand for warehousing near transport hubs.
Mott also sees opportunities in adaptive reuse projects, such as converting underutilised retail spaces into mixed-use developments. “The ability to repurpose properties creatively will be a defining factor for success in 2025,” he said.
Flexible workspaces will maintain their appeal as businesses refine hybrid work models. Suburban office spaces are gaining traction for their cost-effectiveness, though urban hubs remain vital for industries prioritising visibility and accessibility.
