Recovery and growth will shape South Africa’s property market in 2025. 

“There is a growing sense of optimism in the residential property market,” says Paul Stevens, chief executive officer (CEO) of Just Property.  

This is supported by economic reforms, political stability and shifting trends in buyer and tenant behaviour. 

Stevens’s insights into the opportunities and challenges ahead paint a picture of a market poised for growth. 

Paul Stevens, chief executive officer of Just Property.

Economic and political context 

South Africa’s economy is beginning to show signs of recovery, with inflation declining from 5,3% at the start of 2024 to 3,8% by October.  

This decline sits comfortably within the target range of 3-6%, allowing the South African Reserve Bank (SARB) to lower the interest rates twice. 

Despite being smaller than anticipated, these cuts signal a trend that should bring relief to consumers. If inflation numbers remain at this level, Stevens anticipates at least a 1% reduction in interest rates over the course of 2025, easing financial pressures on households and boosting market activity. 

A GNU hope 

The May 2024 elections and the formation of the Government of National Unity (GNU) have fostered optimism, strengthening South Africa’s currency and public sentiment. “The GNU has given people and investors hope for the future,” Stevens notes. 

He notes five trends to watch in 2025. 

• Semigration

This continues to shape the market, with coastal cities and towns such as Langebaan, Hermanus, Plettenberg Bay and St. Francis Bay drawing buyers. 

The Western Cape remains a consistent magnet, while Eastern Cape towns, including Gqeberha, are emerging as hotspots due to significant infrastructure investments. KwaZulu-Natal has seen growth along the North Coast in Umhlanga, Ballito, Salt Rock and Umdloti. 

• Security estates and sectional title properties 

These are gaining popularity due to safety concerns and affordability. “Developers are focussing heavily on gated communities, which appeal to a wide demographic,” says Stevens. 

He predicts that this trend will continue to reshape urban living. “Freehold properties still dominate, but sectional titles and estates are rapidly growing in demand.” 

• Luxury market 

This market remains robust, particularly in the Western Cape, Gauteng, KwaZulu-Natal and the Northern Cape. Stevens attributes this to cash buyers, who are less sensitive to interest rate fluctuations. 

“This segment is resilient and continues to perform well, driven by both local and international demand,” he adds. 

• Rental dynamics 

The rental market is experiencing its strongest growth in years, with national rental inflation at 4,8% in Quarter 3 of 2024 (PayProp). Western Cape rental growth leads at 9,3%, followed by Limpopo at 8,4%. Gauteng and Mpumalanga, however, lag behind, with growth rates of 3% and 0,7% respectively. 

On average, tenants now spend less than 30% of their income on rent – a critical benchmark for affordability. Vacancy rates remain low, creating an ideal environment for landlords. 

• Investment opportunities 

The buy-to-let market remains active, buoyed by decreasing interest rates and low vacancy levels. Savvy investors are finding value in well-located properties. 

South Africa’s coastal cities, particularly Cape Town, continue to attract international buyers. Smaller Western Cape towns such as Hermanus, Knysna and Plettenberg Bay are also gaining popularity for their relaxed lifestyles. 

“Foreign buyers are drawn to the combination of natural beauty, infrastructure and affordability,” he observes. 

Challenges, risks and future outlook 

Despite the positive outlook, challenges remain. Affordability is a persistent issue for first-time buyers. Municipal service delivery is another risk, as poorly maintained services can impact the property values and investment potential. 

“We are moving into an ideal property investment cycle,” says Stevens. “I feel very confident that our property market is entering a good upward cycle. This will be spurred by decreasing interest rates and improvements in the economy. Consumers, who have been under pressure for years, will slowly start to see relief.” 

Industry insights into trends, investment opportunities and market dynamics for 2025. 

Full acknowledgement and thanks go to www.just.property for the information in this article.