Against the backdrop of consecutive interest rate cuts and heightened investor confidence, property experts widely predict a relatively positive outlook for South Africa’s residential property market in 2025. For these industry specialists, the country’s property landscape will be characterised by several key trends.
Continued interest rate cuts will drive demand
Although predictions vary, the South African Reserve Bank is widely expected to lower the repo rate by a cumulative 0.75% this year, with the first meeting of the Monetary Policy Committee scheduled for Thursday, 30th January 2025.
Indeed, some property experts anticipate continued cuts throughout 2025. Naturally, reduced interest rates provide some financial relief to homeowners with bonded properties.
Crucially, it expands the pool of potential purchasers by stimulating demand for property from first-time purchasers and savvy investors alike. In areas where housing stock is low, increased demand affords sellers greater leverage and power to negotiate higher prices.
Semigration mainstay: The Western Cape
As the primary benefactor of waves of semigration, largely from Gauteng, property experts anticipate that the Western Cape will continue to drive residential values. Predictably, there has been a significant rise in the price of properties across the Western Cape, including family-friendly suburbs like Noordhoek and charming coastal towns, such as Paternoster and Hermanus.
Industry specialists, however, point to KwaZulu-Natal and Gauteng as offering purchasers higher value, with these provinces offering more housing stock, having experienced minimal, if any, capital growth in the preceding year.
Emphasis on eco-friendly features
Amid rising electricity tariffs and uncertainty over the resumption of load shedding, a growing number of homeowners have turned to solar power as an alternative to coal-powered electricity.
In addition to the long-term sustainability and economic benefits of renewable energy, the installation of solar photovoltaic systems generally increases a property’s resale value.
Other popular energy-efficient features include the use of LED lighting, double (or triple) glazing on windows, and smart thermostats. These inclusions heighten the appeal of properties and ultimately lower future maintenance costs. Indeed, new builds increasingly feature sustainable features, including water-saving technologies, such as low-flow faucets and showerheads, native landscaping, automated lights and shades, enhanced insulation, and passive solar design to maximise natural light.
Estate living on the rise
According to recent research from Lightstone, estate living is the fastest-growing component of South Africa’s residential property market. Stimulated by the demand for enhanced security, the number of properties located in residential estates has quadrupled to nearly 490 000 over the last two decades.
Varying in size and degrees of luxury, residential estates generally permit the inclusion of more amenities as the costs of financing and maintaining security features, communal areas, and other amenities – per square metre – are shared by numerous owners.
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*This article was originally posted on the STBB website.
