Tag Archives: Lew Geffen Sotheby’s International Realty

South Africa’s residential property market is evolving – fast. Usually a steady anchor, offering relative security during periods of uncertainty, recent data suggests the sector is undergoing a period of adjustment, shaped by financial strain, affordability concerns, and shifting demographics.

Data points to a market in motion. According to FNB, the average time homes spent on the market improved slightly in Q4 2024, dropping to 11 weeks from 11.2 weeks in Q3. But by Q1 2025, it ticked back up to 12 weeks and one day.

Still under the long-term average of 13 weeks, this movement signals cautious optimism – buyers and sellers are active but not rushing.

And, although nominal house prices have edged higher, there is still uncertainty over whether this indicates a lasting recovery, says Lew Geffen Sotheby’s International Realty CEO Yael Geffen.

“Our economic landscape is too volatile to call this a definitive upturn. Global factors, like potential Trump tariffs, rand instability, and revised growth forecasts, mean we must watch this space closely,” Geffen warned.

Financial pressure is pushing more homeowners to sell—and to price their properties realistically. In Q4 2024, 26% of sellers cited financial stress as the main reason for selling, up from 23% in the previous quarter and well above the long-term average of 19% since 2007.

Price corrections are no longer strategic – they’re necessary. Sellers are adjusting expectations, and buyers are coming prepared.

As economic headwinds persist, more homeowners are scaling down. “Own what you can afford” has become the new mantra. Aspirational buying is giving way to smart, sustainable homeownership.

According to Lightstone, nearly 50% of first-time buyers are aged between 30 and 45, and 14% are under 30. Remarkably, there are now more first-time buyers under 45 than repeat buyers—a clear sign of commitment to ownership, even in tough economic conditions.

Security, lifestyle benefits, and “lock-up-and-go” convenience are making sectional title units increasingly popular. This segment continues to outperform, especially among urban professionals and younger buyers.

Rental inflation is outpacing consumer inflation, and rising electricity, transport, and food costs – driven by a weak rand – are stretching tenant budgets to the limit.

But tenants aren’t standing still. Many are aggressively saving for deposits to break out of the rental cycle. Payprop data shows rental growth has stabilised between 4.5% and 5%. The message is clear: the bigger the deposit, the better the bond—and more South Africans are taking note.

House prices are rising – but is this the start of a recovery or just a temporary bounce? Geffen cautioned: “Our economic landscape is too volatile to call this a definitive upturn. Global factors, like potential Trump tariffs, rand instability and revised growth forecasts mean we must watch this space closely.”

The Western Cape continues to set the benchmark with strong rental growth and low vacancy rates. “Good governance and efficient service delivery attract investment and residents,” said Geffen. “When people see their rates payments translating into tangible improvements, demand follows.”

But semigration is shifting gears. Cape Town’s surging prices are driving buyers inland, where value is more accessible. At the same time, reverse semigration—and even reverse emigration—are gathering pace, as returning residents look to reclaim lifestyle and affordability back home.

With interest rates softening slightly, first-time buyers – especially women, who are leading this category – are jumping in. “Homeownership offers enduring appeal, especially in a market where many are entering for the first time,” said Geffen.

“In addition, ooba had its highest historic national average bond value processed last month, which does indicate the luxury market is back.”

Currently, the R3 million to R5 million bracket is the most active nationally, while the Western Cape sees peak demand between R4 million and R10 million. Luxury properties are making a comeback, showing resilience even in uncertain times.

South Africa’s property market is shifting—but not slowing. Buyers are adapting. Sellers are recalibrating. From rising first-time ownership to a reinvigorated luxury segment, it’s a market alive with potential for those who understand where – and how – to move.

As Geffen summed up: “Property remains one of the most secure investments, but success hinges on understanding the market’s nuances. Whether buying, selling or renting, realism and strategic planning are key.”

As South Africa’s economy continues to struggle under slow growth and structural challenges, Cape Town’s property market stands apart – delivering consistent returns that outpace national averages and defying concerns of a post-pandemic slowdown.

According to Lightstone, national house prices rose 5.2% in the year to January 2025, while properties in the Western Cape surged by 8.7%. Cape Town has now outperformed the national property market for seven consecutive years.

Even among South Africa’s coastal cities, where average growth is 5%, Cape Town leads with 6.2% – more than triple Johannesburg’s 1.8% and well ahead of Durban’s 1.9%.

Arnold Maritz, co-principal of Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs, had observed this concentration of investment first-hand.

“According to Stats SA, the Western Cape accounted for 38% of national real estate transaction value last year despite having just 11% of the population,” he said. “This concentration of capital spoke volumes about where investors were placing their confidence.”

Cape Town’s strong property performance is backed by robust economic fundamentals. According to Stats SA, the Western Cape now boasts an average household income of R407,000 – 36% higher than Gauteng’s R300,000 and nearly 50% above the national average.

Formal sector jobs in the province grew 3.1% in 2024, compared to just 1.2% nationally, while unemployment sat at 23.4% – well below the national average.

Unlike Johannesburg’s economy, which remains heavily dependent on finance and manufacturing, Cape Town offers a more balanced mix: financial services contribute 22% to provincial GDP, while the city’s tech sector is growing at 8% annually, and green economy investments reached R14.7 billion in 2024, according to Wesgro.

This growth attracted skilled migrants. Stats SA data showed the Western Cape gained 92,000 working-age adults over two years—68% of whom held tertiary qualifications, with 42% in professional or managerial roles.

Service delivery remains one of Cape Town’s strongest selling points. Compared to national benchmarks, the city continues to outperform:

These efficiencies translate into real economic savings. Businesses in Johannesburg reportedly spent 18% more on backup power, and transport costs were 22% higher due to infrastructure challenges.

Cape Town workers, meanwhile, were found to be 15% more productive per hour (Bureau for Economic Research).

The City of Cape Town committed R12.6 billion to infrastructure for the 2024/25 financial year, with R2.3 billion earmarked for alternative energy and R4.1 billion for transport upgrades.

The resilience of Cape Town’s property sector is perhaps most evident in its luxury segment. Three recent sales on Constantia’s Rhodes Drive – each over R40 million – reflected investor expectations of 8–10% annual capital growth, rental yields of 4.5–5.5%, and the benefits of rand-denominated hard assets.

Maritz noted how luxury buyers are becoming increasingly common: “In our office, buyers with budgets exceeding R15 million had become the norm rather than the exception,” he said.

“We repeatedly saw clients inquiring about specific properties, only to learn they were sold within days – sometimes hours – of listing. The speed at which quality stock moved in these neighbourhoods was remarkable.”

Emerging markets like the Northern Suburbs showed 12% price growth in 2024, while mixed-use developments commanded an 18% yield premium over single-use properties, according to JLL South Africa.

While some analysts have questioned whether the market could maintain such momentum, the fundamentals remain strong. FNB projected annual price growth of 7–9%, with the prime segment reaching as high as 10–12%.

In high-demand areas such as Constantia, Claremont, and Bishopscourt, Lightstone data indicated gross yields of 5.5–6.2%.

Cape Town’s property market continues to attract capital, skills, and investor confidence – making it one of South Africa’s few economic outliers in a challenging national environment.

More than half of all property sales in most Cape Town suburbs are now sectional title, a trend driven by the city’s sharply rising real estate prices.

Now Africa’s most expensive city for real estate, Cape Town’s housing market has surged in recent years. According to Lightstone data, it is also outperforming Johannesburg in both price and volume of sales. In 2024, Cape Town recorded R81 billion in property sales, up from R74 billion in 2021.

Meanwhile, Johannesburg’s figures declined from R59 billion to just over R47 billion in the same period.

Despite escalating prices, Lew Geffen Sotheby’s International Realty’s Brent Townes believes the sectional title segment still offers value.

These properties—typically apartments or townhouses in shared developments—allow individuals to own a defined section of a building along with a stake in the common property. They’re increasingly popular among first-time buyers, who now account for 40% of purchases in this segment.

Forty percent of sectional title purchasers are first-time buyers looking to get a foot on the ladder of Cape Town’s buoyant property market, said Townes.

First-time buyers now account for 72.71% of the market—up from 71.34% a year ago—indicating growing confidence among new entrants, according to MyProperty Home Loans’ latest data comparing March 2024 to March 2025.

Despite financial pressures from the March Budget, several positive shifts have improved conditions for buyers, including a reduced prime lending rate (from 11.75% to 11%), a higher transfer duty exemption threshold, and zero transfer duty on homes under R1.2 million.

The average first-time buyer purchase price rose slightly to R1,215,522, while the average approved bond amount jumped from R1,029,192 to R1,567,694.

Among the city’s most desirable areas for sectional title are the Southern Suburbs, where proximity to top schools, the University of Cape Town, commercial hubs and green spaces has pushed demand—and prices—higher.

However, for those looking for more accessible pricing or lock-up-and-go convenience, there’s a multitude of sectional title options, especially in Observatory, Salt River, Claremont, Wynberg and Wynberg Upper, Rondebosch and Plumstead, said Townes.

While average property prices in these suburbs sit around R2.25 million, sectional title units can range from R800,000 to R1.3 million.

Thanks to rampant development in recent years, which has seen the number of sectional title properties soar, coupled with rising freehold prices and lifestyle choices, more than 50% of the properties sold are now sectional title with options to suit all budgets and lifestyle needs, said Townes.

Townes also highlighted robust interest from investors—many purchasing for rental income or for their children attending university:

These buyers tend to either buy for their children attending university, for third-party tenants in the rental sector, and also for the purposes of having a diversified investment outside of their current metro where they reside.

He cautioned buyers to prepare for costs beyond the purchase price. While the purchase price is certainly the largest expense, additional costs can quickly add up, and they aren’t always factored in when buyers set their budgets.

For a R2.25 million apartment, additional upfront costs can exceed R200,000, including:

• Bond registration: R52,603
• Transfer fees: R97,634
• Moving expenses: R10,000+
• Utility deposits: R2,000+
• Wi-Fi/fibre setup: R1,500–R5,000
• Insurance: R500–R2,500/month
• School fees/uniforms: R5,000+

Beyond the purchase price, buyers should budget for at least R200,000 to R250,000 in additional upfront costs, Townes explained.

Monthly levies are another key consideration, especially in complexes offering premium amenities.