How much you need to earn to live in South Africa’s most sought-after estate

New property data from Pam Golding for the period January to April 2025 confirms that Paarl continues to lead the Cape Winelands as the top-performing residential hub.

Strong sales were recorded across all price bands, with a notable 27% of buyers aged under 35 — a sign that younger, affluent South Africans are entering the luxury property market.

Estate living remains in high demand. Over the past year, 99 new freehold homes were sold in the area, 55 of them within estates, at an average price of R4.15 million.

At the pinnacle of this market is Val de Vie Estate, situated just outside Paarl between Stellenbosch and Franschhoek. Widely regarded as South Africa’s premier lifestyle estate, Val de Vie has become a magnet for high-net-worth individuals seeking luxury, security, and an unmatched quality of life.

Spanning 917 hectares, Val de Vie offers secure, family-friendly living set against the backdrop of the Cape Winelands. Originally developed on historic farmland, the estate has expanded into a thriving, multi-generational community with world-class facilities:

-Outdoor living: 42 km of cycling trails, 21 km of walking paths, tennis and squash courts, and a 25m heated indoor pool
-Equestrian facilities: 64-stable equestrian centre with arenas and paddocks
-Wellness: Three wellness centres, offering yoga, Pilates, and indoor cycling
-Dining and lifestyle: Restaurants, a wine cellar, boutique retail, and a coffee roastery
-Security: 24/7 biometric access, armed patrols, and infrared perimeter fencing — often cited as Africa’s safest estate

Its proximity to top private schools, medical facilities, and Cape Town (less than an hour’s drive) further adds to its appeal.

Pam Golding reports that the median sale price at Val de Vie has climbed to R15.5 million, up from R12.8 million in 2023 — a 21% increase in under two years, reflecting both rising demand and the concentration of wealth flowing into the Winelands.

At this price point, monthly rates and levies typically total around R10,000 (R5,000 each).

Assuming a 15% deposit, you’d finance R13.175 million over 20 years at the current prime lending rate of 10.75%. That translates to an estimated monthly bond repayment of: R133,756 per month

Following the standard guideline that no more than 30% of your gross income should go toward home loan repayments, you would need to earn: R445,854 per month, or R5.5 million annually

Banks also evaluate net surplus income, factoring in all deductions and expenses, to ensure repayment affordability.

Mortgage relief as prime rate drops to 10.75%

The property industry has welcomed the latest interest rate cut announced by South African Reserve Bank Governor Lesetja Kganyago, viewing it as much-needed relief for consumers – particularly homebuyers and mortgage applicants.

Following the May meeting of the Monetary Policy Committee (MPC), the Reserve Bank lowered the repo rate by 25 basis points to 7.25%, while the prime lending rate now stands at 10.75%.

While modest, the reduction is expected to make mortgage repayments slightly more manageable, providing a welcome reprieve amid ongoing economic strain.

The decision reflects the central bank’s confidence in the current inflation outlook, with consumer inflation remaining below the 3–6% target range — creating space for monetary easing.

Subdued economic growth, low inflation and weaker consumer and business confidence made a compelling case for further interest rate relief, which manifested at this month’s (May) MPC meeting, said Dr Andrew Golding, chief executive of the Pam Golding Property group.

Encouragingly, with inflation remaining below 3% (2.85% in April), the Monetary Policy Committee seized the opportunity to give South Africa’s economy a much-needed boost in sentiment.

“Furthermore, with Inflation surprising on the downside in recent months and, with a petrol price cut likely next month (June) – although partially offset by the 15 cents per litre hike in the fuel levy – price pressures are likely to remain subdued.”

Coupled with this is the fact that local economic recovery was sluggish in the first quarter of the year, with GDP growth forecasts downgraded to around 1.5% for 2025, he said.

In addition, consumer confidence trended downwards, partly due to the proposed 2% VAT hike and general increase in the tax burden in the 05/06 Budget.

Golding noted that the hike in the fuel levy, instead of a VAT hike, is likely to stress already constrained household finances. “Apart from providing some debt relief for consumers in general, a reduction in the interest rate is a positive indicator for sentiment in the housing market, providing encouragement for those with existing mortgages or seeking credit to buy their first home.”

Golding pointed out that analysts arguing for a rate cut ahead of the MPC’s decision noted that at least 15 major central banks have cut interest rates since early-April, when the US administration triggered a wave of turmoil with punitive tariffs hikes which were subsequently temporarily paused.

“Given the weak state of the local economy and the benign inflation rate, the Reserve Bank appears to have followed the lead of these banks.”

The Bureau for Economic Research (BER) has suggested that it is a matter of time before the Reserve Bank introduces a lower inflation target, which will also discourage further interest rate cuts as the Bank attempts to anchor inflation expectations around the new, lower inflation target.

The governor said that the committee considered a scenario with a 3% inflation objective, which corresponds to the low end of our target range. “We will also consider scenarios with a 3% objective at future meetings,” Kganyago said.

While welcoming the rate cut, Samuel Seeff, chairman of the Seeff Property Group, believes it falls short of what the economy urgently needs.

The rate reduction – the fourth since mid-2024 – brings the prime lending rate from 11% to 10.75%.

Although a positive step, Seeff argued that the Reserve Bank missed a crucial opportunity to cut by 50 basis points, which would have offered greater relief to consumers and injected much-needed momentum into the economy and property market.

Seeff said that at this pivotal juncture, there is nothing more critical right now than economic growth and job creation. “Lowering borrowing costs would stimulate business investment and crucially, put more money back into the pockets of consumers, thereby boosting spending.”

“The property market currently still lags the pre-Covid volumes with the first quarter of this year disappointingly some 10% down compared to the same time last year.”

Nonetheless, Seeff said that with continued access to mortgage finance and areas seeing price growth where stock is tightening, there are positive signs for both buyers and sellers.

Rate Cut on Monthly Bond Repayments

(Based on a 20-year loan term at the new prime rate of 10.75%)

Bond AmountPrevious RepaymentNew RepaymentMonthly Saving
R750,000R7,741R7,614R127
R900,000R9,290R9,137R153
R1,000,000R10,322R10,152R170
R1,500,000R15,483R15,228R255
R2,000,000R20,644R20,305R339
R2,500,000R25,805R25,381R424
R3,000,000R30,966R30,457R509
R5,000,000R51,609R50,761R848

Seeff said that while the rate cut is welcome, more decisive action will be needed in upcoming MPC meetings to truly unlock economic growth and support South African households.

Prime land on South Africa’s richest street just sold for R170 million

Two adjacent vacant erven comprising a total of 2 700sqm and situated in prime position in what is considered South Africa’s most prestigious and coveted address – Nettleton Road in Clifton – have been sold for R170 million.

According to long-term resident agent and area specialist, Annette Hepburn of Pam Golding Properties, while these erven have planning permission for nine apartments, the buyer, a multinational entity based in various countries, has indicated that it is intent on building one expansive trophy property.

“This is one of a few remaining vacant sites in this highly sought-after address, where properties rarely become available, and when they do, opulent, completed residences can be acquired for upwards of R150 million,” said Hepburn.

Nettleton Road is the most exclusive road in the country, with a limited number of residential properties, large luxurious, iconic homes which offer all the elements desired by high-net-worth individuals.

“Panoramic views from Nettleton Road sweep from the Twelve Apostle Mountain Range to all four Clifton Beaches. This premium location is home to captains of industry and some of the most luxurious designer homes in South Africa,” said Hepburn.

Clifton’s residential property median sales price of R34 million for 2025 to date is +29.5% above year-earlier levels and 136% above levels a decade ago.

Sales activity rebounded post-pandemic, remaining elevated ever since, with 18 sales already recorded this year to date (according to Lightstone data) – exceeding the whole of 2019 and close to the 2023 total of 27 sales. These figures include both sectional title and freehold homes.

Currently, Pam Golding Properties is marketing a five-bedroom (all en-suite) multi-storey, residence which was designed by award-winning architect, Stefan Antoni, and which is also situated in Nettleton Road, priced at R160 million, with no transfer duty payable.

With 180-degree views across Clifton and the ocean, this world-class architectural masterpiece has unique, over-sized, open-plan entertainment areas carefully integrated into the natural environment. With specifications of international standards, the villa is spread over five levels, each accessible by private glass elevator. 

It includes a bespoke Italian Assirelli designer kitchen, level garden with outdoor lounge and dining areas, exceptional views from the spacious entertainment terrace complete with a 16-metre heated infinity pool, four reception rooms, home office, media room, gym, laundry, steam room, three additional guest cloakrooms, staff apartment with two bedrooms, kitchen and bathroom plus a security suite at the entrance – on ground level.

There is 24-hour security, four garages and four off-street parking bays.

First-time home buyers in SA now older, wiser – and spending more

Over the past decade the vast majority of properties purchased by first-time homebuyers as their primary residence has been freehold homes, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

During this period, according to data from ooba Home Loans, the percentage of freehold homes purchased by first-time homebuyers has barely shifted, declining from 70% in 2014 to 66% in 2024.

Source: ooba Home Loans

“Conversely, however, while first-time buyers (FTBs) may opt for freehold homes for their primary residence, there has been a clear shift towards sectional title homes as investment or buy-to-let properties,” said Dr Golding.

In 2014 there was a slight preference for freehold homes (52% of FTB investment purchases) but by 2024, sectional title purchases dominated at 60% of all FTB investment purchases.

“Positively, FTBs are also embracing the national trend towards the acquisition of investment/buy-to-let properties, with the percentage of FTB purchases of total mortgage applications from this segment received by ooba Home Loans rising from just 4% in 2014 to an average of 10% in 2024,” said Golding.

This compares to the national average demand for investment properties which account for 12.75% of all mortgage applications received by ooba Home Loans during the first four months of the year.

“Increasing demand from first-time buyers has resulted in a real (inflation adjusted) increase in the average price paid by those purchasing their first property during the first four months of the year.

“During the first four months of 2025, the national purchase price by home buyers in South Africa averaged R1.66 million, which reflects an increase of +2.7% compared to the same period last year. Notably, during the same four-month period this year, the average price paid by first-time buyers was R1.245 million, which shows an increase of +4.7% compared to year-earlier levels.”

Dr Golding said that in 2014, a first-time buyer purchasing an investment property paid much the same for that property regardless of whether it was a freehold home (R1.045 million) or sectional title (R1.026 million).

While the percentage of FTBs acquiring an investment property opting to purchase a freehold home declined, those who did so bought more expensive homes – with the average price paid rising by 111% over the course of the past decade to an average of R2.21 million in 2024. 

This compares to an increase of just 42.1% over the same period to an average purchase price of just R1.46 million this last year (2024) for FTB sectional title purchases bought as investment / buy-to-let properties.

A slight majority of FTBs purchase their properties alone, a statistic which has not changed much over the past decade (52% in 2014 and 55% in 2024).

“Possibly due to people delaying marriage, there has been a slight decrease in the percentage purchasing with a spouse, declining from 34% in 2014 to 27% in 2024.

“However, purchasing with another person has risen from 14% to 18% – perhaps reflecting those buying a home with a partner, family member or friend instead of a spouse,” said Golding.

Source: ooba Home Loans

“The age of first-time buyers has increased steadily over the past decade, with a clear inflection point when interest rates were cut aggressively during the pandemic.

“While one may have expected the lower rates to have significantly boosted the number of younger people purchasing a home, it actually appears that it allowed many older FTBs into the market,” said Golding.

“The main shift was away from >24 to 33 years to those over the age of 43 years – the latter category is now the fastest growing age cohort of first-time buyers. Nonetheless, the largest age group is >33 to 43 years with a more recent average age of 35 years.”

Regionally, ooba Home Loans’ statistics revealed that during the year-to-date demand from first-time buyers was strongest in Mpumalanga (57.3%) – followed closely by the Free State (55.9%).

Gauteng South & East (51.4%) and KwaZulu-Natal (51.2%) were the only other regions in which FTBs accounted for more than half of all their applications for home loan finance.

How much you need to earn to afford a R20 million home in South Africa

In 2025, buying a R20 million home in South Africa remains a rarefied financial feat—available only to a small slice of the country’s income-earning elite.

While luxury properties continue to attract attention from both local and international buyers, new data highlights just how exclusive this market truly is.

To purchase a R20 million home, buyers often make a substantial upfront payment—and in many cases, the full amount is paid in cash.

However, assuming a conventional scenario with a sizeable 20% deposit (R4 million), the remaining R16 million would be financed through a home loan.

At a 10% interest rate over 20 years—a standard rate in the current market—the monthly repayment would amount to approximately R148,000.

This figure excludes other significant expenses such as property taxes, levies, insurance, and maintenance.

According to financial best practice, no more than 30% of gross monthly income should go toward home loan repayments. This means a buyer would need to earn about R493,000 per month—or roughly R5.92 million annually—to afford a home of this value.

Given South Africa’s 45% marginal tax rate on high incomes, even this figure likely underrepresents the true pre-tax income required to comfortably service such a loan.

High Earners: A Tiny Demographic

According to recent SARS data, approximately 11,380 South Africans earn more than R5 million per year, out of 7.4 million registered taxpayers. A further 330,000 individuals earn between R1 million and R5 million annually.

This indicates that fewer than 0.2% of taxpayers are realistically positioned to afford homes priced at R20 million and above.

Luxury Market Trends

Despite the narrow buyer pool, demand for high-end properties remains strong. According to the Seeff Property Group, 144 properties in Cape Town priced above R20 million were sold in 2024, totalling R4.4 billion in value.

In Cape Town alone, 9% of 900 homes sold across the Atlantic Seaboard and City Bowl were priced above R20 million.

The exact number of such properties outside Cape Town remains unclear, but 2017 data estimated that around 2,400 homes were worth R20 million or more – 580 of them in Johannesburg.

This number has likely increased significantly, driven by rising property values and growing interest in luxury real estate.

While Cape Town continues to dominate the high-end market, other affluent areas across the country have emerged as hotspots for wealthy buyers. These include Stellenbosch and Somerset West in the Western Cape, the Garden Route, and parts of KwaZulu-Natal such as Umhlanga and Ballito.

In Gauteng, Sandton, Houghton, and Waterkloof remain top-tier residential nodes, attracting both local and international investors.

Real estate platforms show active listings far beyond that price point. Pam Golding Properties currently lists 438 properties over R20 million—though this includes commercial properties and farms—while Seeff has 215 homes for sale exceeding the threshold.

Foreign Buyers and Market Viability

Foreign interest also continues to drive this market, particularly in Cape Town’s premium suburbs. Roughly 32% of high-end property sales on the Atlantic Seaboard involve international buyers, underscoring the city’s global appeal.

In short, the R20 million home market is a niche, high-barrier space largely occupied by ultra-high-net-worth individuals and foreign investors. With very few South Africans earning the income required to finance such purchases, most transactions are cash-based or funded by wealth rather than salary.

For most South Africans, the dream of owning such a home remains exactly that—a dream. But for a select few, the combination of wealth, access to capital, and strong luxury property performance makes this market not only viable but thriving.

A look at the luxury riverfront home with jetty access for sale in Kenton-on-Sea

A two-hectare property overlooking the Bushmans River on Grahamstown Road, Kenton-on-Sea, is on the market for R15 million through Pam Golding Properties.

The property includes a main house with four en-suite bedrooms, multiple living areas, a dining room, formal lounge, and outdoor spaces. Additional buildings include a 180 m² two-bedroom cottage with river views and two self-contained flatlets.

The property has direct road access to a private jetty on the river. Features include a swimming pool, garden, four garages, 10 parking bays, an open-plan wood kitchen, built-in cupboards, an undercover braai area, and a natural rock pool.

Security measures include an alarm system, electronic beams, fencing, and automatic gates.

Joburg suburbs climb the ranks in most searched property hotspots

A recent assessment of web searches on property group Pam Golding’s website reveals some notable trends regarding locations attracting high interest.

“While Cape Town retains top spot for searches on the Pam Golding Properties website, Gauteng locations such as Bryanston and also Sandton overall account for an increasing number of web searches,” said Dr Andrew Golding, chief executive of the Pam Golding Property group.

“In fact, for the six-month period August 2024 to January 2025, seven of the top 20 searches were for suburbs in Gauteng, with Bryanston and Sandton (as a whole) in second and third place behind Cape Town. Notably, Gauteng locations accounted for nearly a third of all the top 20 searches during this period.”

“This is compared with the first quarter of 2024, when Gauteng accounted for only five of the top 20 searches on our website, with Bryanston in fifth place and Sandton seventh.”

Sandton’s reputation as a premier business and luxury hub plays a significant role in the uptick in enquiries, particularly in the luxury market from R15 million plus, where viewing interest has increased.

This is not only among South African buyers and returning expats, but also international purchasers predominantly from African countries, and from Europe.

There has also been a notable increase in offers submitted on properties priced around R11 million to R15 million, said Nelson Ferreira, regional head in Gauteng for Pam Golding Properties.

“Due to its vibrant lifestyle, lucrative business opportunities and upscale living environment, this area has always appealed to international property buyers for various reasons. This includes those relocating permanently or with three-to-five-year contracts in the area, while other global investors are purchasing apartments to rent out and build a property portfolio in Southern Africa.”

Bryanston remains a sought-after address because of its central locality, top government and private schools, and close proximity to Sandton CBD just 8km away.

It is also only some 17km to Midrand, and for commuters to Tshwane, offers easy access to the highway. Bryanston is dissected by Winnie Mandela Drive, one of Johannesburg’s busiest arterial roads, which effectively separates east from west Bryanston.

There are several distinct property segments in Bryanston – each in high demand, albeit currently with an oversupply, according to Ferreira.

Development market

Comments Ferreira: “Reflecting the ongoing demand and desirability of the area, developers are actively acquiring freehold properties from 1 900sqm to 4 200sqm, resulting in a wide range of both estate-style clusters and sectional title developments being built.

Developers are especially interested in stands that have been rezoned as they offer strong prospects for redevelopment, renovation and resale. Currently, the going rate for rezoned land – whether vacant or with an existing home – is approximately R1 000 per square metre.

Full title homes

Typically set on large stands from approximately 1 900-4 300sqm, making them highly attractive to developers, full title homes are available in both Bryanston East and Bryanston West – with the East more developed with newer builds, while the West comprises mainly older or more existing, mature homes,” says Ferreira.

“In Bryanston West, entry-level pricing for full title homes starts at approximately R3 million, which generally comprises a four-bedroom, 3.5-bathroom house. Homes in this area range up to R15 million, offering substantial opportunity for renovation. In the East, full title prices begin at around R5 million and extend up to R40 million, with a similar range of stand sizes creating significant potential for investors, particularly developers.

Sectional Title units

“The sectional title segment of the market is extremely attractive to first-time buyers because of its affordability, security features, and the opportunity to live in one of Sandton’s most sought-after suburbs.

What makes this sector particularly competitive is that sellers of existing units must compete with these brand-new, sectional title developments with studios starting at around R900 000, two-bedroom apartments ranging from R1.2 million to R1.7 million, and three-bedroom apartments or townhouses priced between R3.3 million and R4.7 million.”

Ferreira said buyer preferences in Bryanston East vary – some are seeking freehold properties of 2 000sqm or more, with a minimum of four bedrooms and within gated communities, while others typically prioritising a spacious yet secure lock-up-and-go lifestyle are looking for secure cluster homes on approximately 1 000sqm of land, with 400-600sqm under roof.

Cluster and Gated Estates

“Another standout segment is the cluster and gated estate market, where buyers can enter from around R3 million, while premium properties can exceed R20 million.

These estates offer excellent security, lower levies – especially compared to various sectional title units, and larger stand sizes ranging from 400-1 200sqm. Homes in this market segment tend to sell quickly due to strong demand and the appeal of estate living.”

Here’s how many families have moved to Cape Town over the last two years

In recent years, the Western Cape has emerged as a prime destination for South Africans relocating within the country, a trend commonly known as semigration.

Several factors contribute to this shift, including a desire for a better quality of life, economic opportunities, and an increasingly stable property market. This movement is not only attracting local buyers but also foreign investors, which further drives up property prices in the region.

Pam Golding notes that the initial wave of semigration to the Western Cape began between late 2013 and late 2016, with a resurgence post-2020, largely influenced by the pandemic, the 2021 civil unrest, and growing concerns over municipal service delivery.

According to Lightstone Property’s 2024 report, the number of homeowners opting for interprovincial relocation has significantly increased. In 2019, only 16% of homeowners chose to move to another province; by 2024, that figure had surged to 27%. This marks a noticeable shift in the mobility of South African homeowners.

Cape Town, under the leadership of the Democratic Alliance since 2006, has become the country’s best-managed major city, drawing middle-class families from poorly governed metros, especially after the rise of remote working during the COVID-19 pandemic, as reported by Bloomberg.

The influx of new residents has created a shortage of affordable housing, further pricing locals out of the market. Data from Statistics South Africa shows home prices have risen by 30% over the five years ending in March 2024.

“The numbers are quite staggering,” said Geordin Hill-Lewis, mayor of Cape Town. “In the last two years, 100,000 families moved to Cape Town from elsewhere in South Africa,” with approximately 80% of these households coming from Gauteng.

City officials approved more than 4 000 plans for buildings, including residential, industrial and commercial works, worth R7.5 billion in the three months through December, a 61% increase in value from a year earlier, spokesperson Luthando Tyhalibongo told Bloomberg.

In its latest budget, the provincial government said it will invest R30.879 billion in 924 projects over the next three years, ensuring communities have access to better roads, housing, schools and healthcare facilities.

While there have been calls locally for the city to intervene in the housing market with mechanisms such as price controls, Hill-Lewis doesn’t agree. “That’s a very bad idea and has perverse consequences, where you actually get less investment, and therefore higher prices over time.”

To address the increasing demand for housing, Cape Town is fast-tracking municipal planning processes, with changes to planning by-laws expected. These changes will help reduce the approval timeline for construction plans from around two years to a few months, allowing the city to better respond to the growing housing demand.

“We want to see applications move through the system quicker and deliver more affordable accommodation,” said that mayor, however, he strongly opposes the idea of price controls. “That’s a very bad idea and has perverse consequences, where you actually get less investment, and therefore higher prices over time,” he said.

The city plans to invest R120 billion in infrastructure, including power, water, and transport networks, over the next 12 years. Visible policing and other measures to combat crime will also be implemented.

As the demand for properties in established hotspots like the Southern Suburbs and Stellenbosch continues to grow, new areas are emerging as the next desirable locations.

Areas such as George, Somerset West, and the West Coast are gaining traction, showing that as one area becomes saturated, others with better value for money and a similar quality of life are rising in popularity. This shift in demand is reshaping the Western Cape’s property market and offering new opportunities for both buyers and investors.

Cape Town’s Southern Suburbs

Popular Areas: Constantia, Claremont, Rondebosch, Newlands
These suburbs have long been sought after by families for their proximity to top schools, parks, and suburban living, while still being close to Cape Town’s city center. High demand in these areas continues to push up property prices.

Stellenbosch & Surrounding Areas (Cape Winelands)

Popular Areas: Stellenbosch, Franschhoek, Paarl, Somerset West
With its prestigious universities and picturesque surroundings, Stellenbosch remains a top choice for semigrants. The charming atmospheres of Paarl and Franschhoek, coupled with their proximity to Cape Town, are also driving demand. Somerset West, known for its family-friendly environment, is growing in popularity as well.

The Garden Route

Popular Areas: George, Mossel Bay, Knysna, Plettenberg Bay, Sedgefield
The Garden Route is becoming increasingly popular, especially with retirees and those seeking a quieter, slower-paced lifestyle. George and Mossel Bay offer more affordable alternatives to Cape Town, while Plettenberg Bay and Knysna attract higher-end buyers.

The Boland (Ceres Valley and Worcester)

Popular Areas: Worcester, Ceres, Robertson
As established areas like Stellenbosch become saturated, towns further inland, such as Worcester and Robertson, are gaining traction. These areas offer a quieter, rural lifestyle at more affordable prices, with easy access to Cape Town and surrounding nature.

Atlantis and the West Coast

Popular Areas: Langebaan, Yzerfontein, Velddrif
As Cape Town’s urban areas become more congested, the West Coast is emerging as an attractive alternative. The relaxed lifestyle, lower property prices, and access to nature are making towns like Langebaan and Yzerfontein increasingly popular.

Helderberg Basin

Popular Areas: Strand, Gordon’s Bay, Somerset West
The Helderberg Basin is witnessing a significant rise in demand due to its beautiful beaches, slower pace of life, and good local amenities. Somerset West remains a top choice for families, while Gordon’s Bay and Strand appeal to those seeking a coastal lifestyle at a more affordable price.

The Overberg

Popular Areas: Hermanus, Gansbaai, Swellendam
Hermanus, known for its stunning coastal scenery, is becoming a sought-after destination for semigrants, particularly those seeking a blend of outdoor living and a growing infrastructure. Gansbaai and Swellendam offer more affordable properties while still maintaining the coastal charm, making them attractive to those looking for quieter areas with easy access to nature.

The dynamic property market in the Western Cape continues to evolve as semigration reshapes demand and introduces new areas for buyers and investors to explore.

How the budget impacts home owners in South Africa

South Africa’s budget shows increased infrastructural spend in key property growth hubs against backdrop of disappointing VAT increase, says Dr Andrew Golding, chief executive of the Pam Golding Property group

“It was positive to note that the critical need for infrastructural improvements has been highlighted in today’s National Budget, as investment in sound infrastructure with a focus on energy, clean water supply and effective sanitation, well-maintained roads and other transport facilities, as well as affordable and effective broadband connectivity, promotes economic growth, and fosters employment opportunities.”

It also ultimately attracts new businesses and both residential and commercial property development and helps foster thriving economic hubs, Golding said.

This is evidenced by the semigration trend, which continues to see home buyers relocate to municipalities with good infrastructure and sound management.

Investment in owning one’s own home is recognised as a key aspiration for people across all sectors of the market, with benefits including capital appreciation and potential rental income.

According to the Pam Golding Residential Property Index, national house inflation continues to gather momentum, rising to +5.75% in January 2025, which is higher than the post-pandemic peak of +5.6% in May 2021.

While the National Treasury was faced with a challenging balancing act in delivering the National Budget, the increase in VAT, albeit 0.5% in the short term – with a further 0.5% the following year (2026/27) – will impact already cash-strapped consumers, particularly those who can ill afford it – this despite the increase in zero-rated foods to cater for the poor.

With citizens about to be hit with hefty electricity hikes – which will attract increased VAT, this simply increases financial pressures on consumers who must also pay VAT on other municipal tariffs – all of which adds up to a sizeable share of their monthly income, Golding said.

“From a property perspective, there are a number of VAT-inclusive services associated with the purchase of a home, for which buyers will need to allocate additional budget, which will impact particularly on first-time buyers seeking to gain a foothold on the first rung of the property ladder.

“Furthermore, purchasers of new-build units will also be affected, as VAT is incorporated in the purchase price of new developments when brought to market by developers,” said Golding.

There was some good news for homebuyers in the Budget, as the thresholds for transfer duties will be adjusted by 10% to compensate for inflation.

“Obviously, it was difficult to adjust the transfer duty thresholds again with current pressure on the fiscus, but the threshold for exemption from paying transfer duty was lifted from R1.1 million to R1.21 million This is particularly positive news for first-time homebuyers as the average price paid by a first-time buyer in early-2025 was R1.24 million, according to ooba Home Loans.”

Golding said that the fact that the fuel levy has not been increased is positive, however, South Africans across the board will be negatively impacted by the lack of inflationary adjustments for personal income tax bracket creep, and for medical tax credits.

“The key issue that needs to be addressed is the lack of economic growth. This requires macroeconomic stability – which this budget delivers even as it places pressure on households,” said Golding.

These prime residential markets are set for growth in 2025

According to a report by Savills, 2025 is set to be a pivotal year for the global real estate sector, presenting both opportunities and challenges.

The report forecasts a 27% increase in global real estate investment turnover, reaching $952 billion, driven by factors such as lower interest rates and heightened investor confidence. By 2026, the market is expected to surpass the $1 trillion mark for the first time since 2022.

Dr. Andrew Golding, CEO of the Pam Golding Property Group, which partners exclusively with Savills for residential real estate in Africa, said that despite the economic turbulence of recent years, prime residential markets have demonstrated remarkable resilience.”

However, the report also cautions that while several markets saw improvements toward the end of 2024, global real estate remains under the influence of complex challenges, including economic uncertainty, geopolitical shifts, and changing priorities.

“Savills’ latest Global Risks Report makes the point that perhaps unsurprisingly, geopolitical risks dominate concerns for 2025.

Its Global Risks Perception Survey also shows a rising sense of urgency regarding the environment. Extreme weather events are the second highest-ranked challenge in 2025, and are anticipated to become even more pressing, achieving the top ranking in the longer-term, 10-year risk outlook.”

The report noted that the recent wildfires tragically affecting Los Angeles are only the latest example of the impact extreme weather can have on urban areas.

Real estate has a key role to play – after devastating wildfires in Australia in 2019 and 2020, for example, the country’s National Construction Code was updated to stipulate fireproof building materials, design and construction, and insists on a minimum distance between vegetation and buildings in high-risk areas.

“An improved economic backdrop is the foundation for real estate market recovery in 2025. As Savills states… while the world faces many challenges, collaboration will be key to navigating them,” said Golding.

“Davos 2025 highlighted the need for global cooperation to tackle geopolitical, environmental, and technological challenges. For real estate, this means prioritising resilience and innovation.”

According to Kelcie Sellers, associate director, Savills World Research – in their Prime Residential Outlook 2025, prime buyers globally will likely continue to prioritise lifestyle in their choice of residential property.

“Dubai, a perennial leader for capital value appreciation, is forecast to top the leaderboard in 2025 with prime price growth of 8-9.9% for the year. A market with growth, supported by a strong supply pipeline, Dubai has seen a number of projects in recent years which have rewritten the market definition of ‘prime’.

“Sydney is also expected to record strong growth, but here it will be driven by a lack of supply, rather than new supply. The persistent scarcity of luxury properties is expected to limit buying opportunities. Coupled with sustained demand from domestic and international buyers and a relatively weaker currency, prime residential prices are anticipated to increase by 4-5.9% during 2025.”

Similar levels of growth are forecast for Madrid, Barcelona and Lisbon. In the Spanish cities, a significant portion of demand comes from foreign buyers with dollar-denominated savings looking to take advantage of a comparatively weaker euro. Lisbon’s positive momentum, supported by forecasts of further interest rate cuts, should also continue.”

“Also in this projected growth bracket is Cape Town, a market where confidence has recovered, economic activity has improved, and domestic and international demand is ongoing. Further interest rate relief and optimism in South Africa’s economic prospects for 2025 should underpin sales activity and growth in prices in the new year,” said Sellers.