The South African property market in 2024 has been dynamic, characterized by fluctuations in buyer behavior, rental trends, and investment opportunities. As we look ahead to 2025, insights from the Rawson Property Group reveal key trends that shaped the past year and what to expect moving forward.
Residential Sales: Trends and Preferences
The residential property market saw record-breaking activity in 2024, particularly in October, which marked the highest sales month in the Rawson Property Group’s history. However, November experienced a noticeable slowdown. David Jacobs, National Sales Manager, describes the market as unpredictable due to external factors like elections and global tensions. Buyers are cautious but still engaged, often taking their time to make decisions.Urban hubs such as Cape Town and Gauteng remain popular, with Gauteng poised for growth once its municipal infrastructure issues are addressed. Jacobs notes a shift in buyer priorities; while home offices were once essential due to remote work trends, buyers are now focusing on properties with high-speed fiber connectivity.Affordability challenges continue to affect first-time buyers, with high living costs keeping demand below pre-pandemic levels. Although two interest rate cuts in 2024 have provided some relief, affordability remains a significant barrier. Jacobs anticipates a stabilization of the market rather than a dramatic boom, advising buyers to research not only properties but also the surrounding infrastructure for long-term value.
Residential Rentals: Urban Demand and Suburban Affordability
The rental market has been vibrant yet challenging, with rising prices and changing tenant preferences. Jacqui Savage, National Rentals Manager, reports strong demand for rental properties in Cape Town, Johannesburg, and Pretoria, particularly among young professionals and international tenants. The national average rent reached R8,654, with the Western Cape averaging R10,300. However, affordability concerns have pushed many tenants towards more budget-friendly areas.Vacancy rates vary across regions; while the Western Cape enjoys low vacancy rates, higher-end properties in Gauteng face challenges due to affordability issues. Looking forward, Savage predicts sustained demand for smaller, affordable units and shared housing solutions as tenants adapt to economic realities.
Property Finance: Improved Accessibility
The property finance sector has seen increased accessibility and optimism in 2024. Leonard Kondowe, National Manager for Rawson Finance, notes that banks have competed for clients by offering flexible terms and attractive interest rates. Buyers who prepared with deposits and prequalification benefited most from this lending environment.With two interest rate cuts reducing the prime lending rate to 11.25%, borrowing costs have eased for bondholders while encouraging tenants to consider homeownership. Kondowe advises first-time buyers to borrow cautiously and strategically plan their finances to manage repayments comfortably.
Commercial Property: Resilience and Innovation
The commercial property sector has demonstrated resilience amid changing demands. Craig Mott, National Business Development Manager, highlights the impact of hybrid work models on commercial spaces. There is a growing demand for flexible workspaces that accommodate both remote and in-office work.The industrial sector has thrived due to e-commerce growth, with warehouses near transport hubs remaining highly sought after. Suburban office spaces are gaining traction as businesses prioritize cost-effectiveness and employee convenience. Mott predicts increased investment activity in 2025 as interest rate cuts and a stable political climate support innovation within the commercial sector.
Conclusion: A Year of Change and Opportunity
As 2024 concludes, the South African property market has showcased resilience and adaptability across all sectors. With stabilizing markets and evolving buyer preferences alongside potential further interest rate cuts, 2025 presents exciting opportunities for those looking to buy, rent, or invest in property.