Reflecting on 2024:
If 2024 had to be summarised in one word, it would probably be "uncertainty". Bradd Bendall, National Head of Sales at BetterBond, aptly described the year as one of volatility and adaptation. With over 100 countries holding elections and conflicts in regions like Gaza, Ukraine, and Sudan affecting global markets, South Africa’s property sector was not immune to these pressures. However, despite these challenges, the local property market showed remarkable resilience and adaptability.
South African Property Market:
The South African property market experienced a renewed sense of optimism, supported by significant political and economic developments. The formation of a government of national unity post-elections boosted investor confidence, strengthened the rand, and facilitated a faster-than-expected decline in inflation. The Monetary Policy Committee’s decision to begin interest rate cuts in September added further momentum to the property sector.
According to FNB’s Senior Economist, Siphamandla Mkhwanazi, the outlook for 2025 remains cautiously optimistic, driven by easing inflation, improving real incomes, and declining borrowing costs.
Residential Sales:
The residential property market in 2024 saw periods of both accelerated activity and stagnation. While the first half of the year was marked by buyer hesitation due to elections and geopolitical tensions, the third quarter witnessed renewed activity, particularly in metropolitan areas like Cape Town and Johannesburg. Middle-to-upper market segments drove this recovery, as improved buyer sentiment and expectations of further rate cuts encouraged confidence and investment.
The Western Cape remained the top semigration destination, benefiting from its coastal appeal and infrastructure. Gauteng, despite initial sluggishness due to municipal service challenges, showed significant improvement in the latter half of the year – topping the Western Cape. Falling home prices and rising employment opportunities have positioned Gauteng for continued growth as service delivery issues are addressed.
The rise in market activity, particularly properties in the higher price brackets, led to shorter selling times, with the average time on the market dropping to 11 weeks and two days in Q3. However, affordability challenges continued to impact first-time buyers and the lower-price segment – the most vulnerable to interest rate movements. For 2025, both economists and agents anticipate that lower interest rates will gradually improve affordability in this sector, although the effect may be delayed.
The property finance landscape in 2024 was marked by competitive lending conditions, including two 25-basis point interest rate cuts in the second half of the year, which encouraged tenants to consider transitioning to homeownership. Banks continued to offer flexible terms and attractive interest rates, but buyers who benefited most in this environment were those who came prepared with a deposit and prequalification. These factors not only boosted approval chances but will also significantly reduce interest costs over time.
Prospective buyers are advised to prioritise properties in areas with reliable infrastructure and municipal services, as these features are critical for long-term value. For first-time buyers, careful planning for manageable repayments is essential to achieving financial stability and avoiding the risks of overextending budgets.
In conclusion, Bendall says: “Indications are that we can expect to see renewed activity on both ends of the market. Lower interest rates should encourage more first-time buyers, while renewed confidence in the economy will see greater investment at the upper end. All of this bodes well for a buoyant property market.”
Positive Shifts Amidst Complexity
The rental market in 2024 was a dynamic and active space. Affordability concerns, rising living costs, and demand for greater flexibility drove demand for well-priced rental property. According to the TPN Residential Vacancy Survey, the first three quarters of 2024 saw vacancy rates drop to their lowest levels since the survey was first published in 2016, reflecting strong demand across the board.
The Western Cape maintained its position as the province with the lowest vacancy rates, followed by Gauteng. Known as South Africa’s economic powerhouse, Johannesburg experienced a surge in demand, particularly in areas with high job intensity, like Sandton, Rosebank, and Midrand – home to many of the country’s largest and most influential business giants. These areas have seen exponential growth in recent years, owing to commercial expansion, large-scale residential development and lifestyle offerings. Meanwhile, affordability pressures led many families and young professionals to seek housing in areas like Randburg, Roodepoort, and Fourways. Smaller, more affordable units and shared housing solutions are gaining in popularity.
This trend is expected to continue into 2025 as tenants navigate economic realities.
As we step into 2025, the South African property market is positioned for steady recovery and growth. With stabilising economic conditions, easing interest rates, and evolving buyer and tenant preferences, opportunities abound for investors, buyers, and renters alike.
At Etchells & Young Property Brokers, we remain committed to guiding our clients through every step of their property journey - ensuring informed decisions and exceptional results in a dynamic market.
