Landsdowne Property Group, a residential real estate manager and estate agency, is optimistic about the prospects for the residential market in 2025.
The company points to improving market sentiment, rising property demand in Johannesburg and the Western Cape, and the potential impact of further interest rate cuts as key factors contributing to this positive outlook.
Jonathan Kohler, Founder and CEO of Landsdowne, said: “Demand for buy-to-let properties will remain strong, as many individuals are unable to purchase homes at this time and prefer to use their available funds to pay down debt.
“However, in select areas of Johannesburg and the Western Cape, driven by semigration trends, we are starting to see an increase in buyer activity.”
Kohler said that Johannesburg has not experienced capital appreciation since 2010, making it a buyer’s market.
“This is an opportune time to invest in property in the metro, but many potential buyers are hesitant due to financial constraints and inadequate service delivery,” he said.
An increasing number of buyers, particularly young professionals and families are opting for homes in secure, lifestyle estates, as reflected in the growing demand for these types of properties. Buy-to-let investors are also benefiting from favourable market conditions.
For example, a 45m² apartment priced at approximately R680,000, renting for R7,000 per month, offers net rental yields of 10.27%. Similarly, a two-bedroom, two-bathroom apartment priced at R1.2 million and renting for R9,750 per month yields a net return of 7.36%.
Kohler also pointed out that KwaZulu-Natal is a buyers’ market, with established estates like Zimbali capitalizing on strong demand for exceptional lifestyle and secure living options.
According to the FNB Property Barometer for October, there has been a notable uptick in market activity, with Gauteng and the Western Cape seeing a surge in activity, while the Eastern Cape and KwaZulu-Natal recorded more moderate levels.
The report also suggests that declining home prices in Gauteng may be attracting more buyers, reinforcing Kohler’s belief that now is an ideal time to invest in property within the metro.
“Now is an ideal time to invest in property within the metro,” said Kohler.
Semigration to the Western Cape is expected to persist into 2025, as buyers increasingly seek quieter, more peaceful lifestyles.
The Western Cape is anticipated to remain the top destination for semigration, while those seeking better employment opportunities are relocating to Johannesburg.
“Many individuals, particularly young professionals, are opting to rent in Johannesburg first before committing to buying property,” Kohler said.
With many households still financially constrained, homeownership remains out of reach for most. As a result, renting continues to be a popular choice, offering the stability of fixed monthly expenses and protecting tenants from sharp cost increases.
Cape Town remains a sellers’ market, driven by semigration trends, strong capital appreciation, and international buyers.
“However, investors should proceed with caution, as the market’s growth is not sustainable in the long term. When a correction occurs, prices may become unaffordable for many South Africans,” Kohler said.
Improved market sentiment and increased activity have led to shorter selling times, with properties now averaging 11 weeks and two days on the market, down from 12 weeks and two days in the second quarter of 2024, according to FNB.
This decline was seen across all regions, particularly in higher-priced segments.
Kohler added that further interest rate cuts in 2025 are expected to boost market demand and activity, ultimately leading to meaningful property price growth.
