As we approach 2025, the South African property market is at a pivotal moment, shaped by various global economic trends, local policy changes, and evolving consumer behaviors. Recent adjustments in interest rates, including a 25 basis point cut that lowered the prime lending rate to 11.25% and the repo rate to 7.75%, are expected to influence market dynamics significantly.
Impact of Interest Rate Cuts on Homeowners
The recent interest rate reduction will have notable implications for homeowners' financial planning. Property24 has introduced an Additional Once-Off Payment feature in its payment calculator tool, which helps homeowners understand how these changes can affect their financial circumstances. By entering details such as current bond debt and repayment amounts, users can assess the impact of the rate cut on their overall costs.
Predictions for 2025
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, anticipates a gradual decrease in the repo rate throughout 2025, potentially totaling around 1.25%. This trend is likely to expand the pool of buyers, including first-time homeowners and investors, while also providing relief for existing homeowners with loans.Goslett highlights that the Western Cape will continue to offer stable returns despite higher entry prices. He suggests that Gauteng and KwaZulu-Natal may present valuable opportunities over the next six months. As interest rates decline and buyer demand rises, the availability of reasonably priced homes may diminish as sellers begin to expect higher offers.Moreover, Goslett emphasizes that real estate professionals will increasingly seek brands that provide substantial value through training, market access, and support services. Those agencies that fail to offer this value may see their agents seeking alternatives.