Six South African property trends for 2025

Pam Golding Property Group CEO Andrew Golding has outlined the six biggest trends he believes will define South Africa’s property market in 2025.

Golding has a positive outlook for South Africa’s property sector in 2025.

With inflation currently well below the lower end of the Reserve Bank’s 3% to 6% target range and electricity supply seemingly under control, the economic outlook for 2025 appears increasingly positive.

November’s CPI came out at 2.9%, slightly up from 2.8% in October but still below the Reserve Bank’s range.

In light of lower inflation, the Reserve Bank started cutting interest rates by 25 basis points at its September meeting this year. It cut rates by a further 25 points at its November meeting.

Golding expects the cutting cycle to continue into the new year, with a further 25 basis point cut likely in January 2025.

“Positively, although the Reserve Bank remains cautious in the light of upside risks to the inflation outlook, the MPC is expected to reduce interest rates by a further 75 basis points in total next year,” he said.

He believes the Reserve Bank will retain its cautious stance, and the timing of the cuts is likely to be influenced by global developments such as the oil price, rand weakness, and US trade tariffs.

“Sentiment in general has improved, which, together with the two recent repo rate cuts of a cumulative 50 basis points in 2024 already creating a ripple effect across the residential property market,” he said.

He noted increasing uptake, particularly in the lower to middle sectors of the market, as well as a boost in confidence and activity in the luxury market.

“From a Pam Golding Properties perspective, this is borne out by the fact that November 2024 has proven a busy month, with our group sales 19% ahead of transactions successfully concluded in November 2023,” he said.

“Furthermore, the banks continue to support the market with competitively priced loans, lower deposits and elevated approval rates.”

He said investors and homeowners will be buoyed by the fact that, according to the Pam Golding Residential Property Index, house price inflation in October 2024 of 5.0% translates into real growth in HPI of 2.2%.

“This means we have seen two consecutive months in which national HPI has exceeded the national consumer price inflation rate, as in September 2024, HPI was 4.7% vs CPI of 3.8%, thereby reflecting real growth in HPI of 0.9%,” he said.

“This augurs well for continued demand for residential property among investment buyers, primarily driven by the Western Cape but also with a meaningful increase in investment demand in the Eastern Cape since mid-2023 and, more recently, in Tshwane.”

He said growth will be further fuelled by ongoing demand for homes among young, first-time buyers and those relocating for lifestyle and other reasons.

Dr Golding further identified six key trends which remain in evidence and will carry through into 2025:

• Semigration to other provinces and locations, including coastal towns.
• Rising number of female buyers.
• Increasing demand for sectional title accommodation.
• Estate living remains sought after nationwide – but particularly in Gauteng.
• Growing popularity of mixed-use developments with convenient access to amenities.
• South Africans purchasing property overseas for investment and leisure use.

All of these considerations, coupled with lower interest rates and increased market confidence, mean there remain sound opportunities offering value-for-money property acquisitions around the country.