SA residential real estate to benefit from positive financial sector
With many recent developments pointing toward a more favourable environment for South Africa’s (SA) financial sector, it is expected to continue into 2025 and benefit the residential real estate market.
According to BusinessTech, Momentum Investments Group, in its December 2024 Financial Stability Review, the country’s financial stability outlook since June 2024, would bring various benefits to the real estate market. The positive SA financial future, predicted for 2025, is noticeable in increased investor confidence, a decrease in electricity cuts (load shedding) and lower interest rates. However, SARB’s November 2024 Financial Stability Review (FSR), shows a revised approach to the financial system’s risks, highlighted in the new Residual Vulnerability Matrix (RVM).
Expected positive changes in the residential real estate market
• Increased demand
With lower interest rates and improved economic conditions, consumer demand could increase, especially from first-time buyers.
• Higher prices
As the economy grows, people may have more disposable income to spend on property, which could lead to higher prices.
• More investment
The real estate market could become a more attractive investment destination, especially in areas with good infrastructure and service delivery.
• More sustainable options
The real estate market could be shaped by a focus on sustainable development, which could lead to more accessible and sustainable living options. This is part of the global Sustainability Goals.
• Better performance in certain regions
Certain regions, such as the Western Cape, could experience higher price growth due to stock shortages as semigration continues with working from home options providing workers with options to work remotely. Other regions - Gauteng, Gqeberha (Eastern Cape) Mpumalanga and Limpopo - could see not only higher sales volumes, but also gradual price increases.
Real Estate trends predicted for 2025
Global conflicts had a knock-on economic effect across the world, resulting in soaring energy and food prices.
In SA, the provincial and national elections in May resulted in considerable uncertainty which was felt across the real estate market, especially the residential section. Home loans declined by 8% during the first quarter of 2024, but again increased by the formation of a Government of National Unity.
This led to improved investor confidence in the country. It also saw the SA currency strengthen and a faster-than-expected drop in inflation, leading to a new sense of optimism. After the decreases in prime lending rates, the housing market saw a more than 10% increase in loan applications. This means a good start to 2025, promising a residential real estate bloom.
Positive 2025 real estate forecasts
• Record-level house price growth
• More foreign buyers
• Ongoing semigration trends with the Western Cape and Gauteng at the top of the list
• Expatriates wishing to return home
• Less volatility in SA than in Europe
• Strengthening of the Rand
• Continued demand for sustainable properties
• Growth of mixed-use developments
• Single buyer owners
• Increased demand in the mid-to-upper segment of the real estate market
• AI expected to drive investment as technology grows
• Growth in the real estate residential market for homes up to R900 000. Only half of these buyers needed a bond.
“My prediction is that uncertainty will, in the residential real estate sector, take more of a backseat. Opportunity will abound and all this would see an upturn for the entire real estate market, not just residential,” Raul Flores
TPG TITANS are a collaboration of the brightest minds in real estate, financial services and property development, establishing them as leaders in the residential real estate sector by focusing on meeting the precise needs of our clients, never settling for anything less than the perfect match. We achieve this by employing the most innovative and forward-thinking partners and operating systems in the industry.
Our team has been deeply involved in transactions; home sales, investment purchases and property management across the country. With our breadth of knowledge and experience, we are equipped to handle everything from straightforward inquiries to complex property acquisitions.
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