South Africa’s property market is beginning to show clear signs of a movement away from renting and towards property ownership, as declining interest rates begin to support more favourable buying conditions. Industry analysts believe this change could signal the beginning of a broader transformation in how South Africans engage with the housing market.
Key Takeaways
- Buying Activity Is Picking Up Amid Lower Interest Rates: Following the start of interest rate cuts in late 2024, South Africa’s property market is seeing a gradual but clear shift from renting to homeownership, particularly among first-time buyers and middle-income earners.
- Gauteng Is Regaining Ground as Buyers Return: While the Western Cape continues to dominate in transfer values, Gauteng remains the leader in transaction volumes. A growing number of professionals are returning to Johannesburg due to career prospects, affordability, and return-to-office policies.
- Global Uncertainty Clouds Future Rate Cuts: Although inflation is at a four-year low and past rate cuts have supported the market, the South African Reserve Bank is expected to pause further reductions for now, due to risks from global trade tensions and geopolitical instability.
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According to comments made to BusinessTech, Nalen Naidoo, the Chief Executive Officer of Property24, stated that the downward trend in interest rates, which began in September 2024, has started to influence consumer behaviour, prompting a shift in demand from rental properties to home purchases. He noted that this change is especially noticeable in metropolitan suburbs where rental demand was previously dominant.
Naidoo explained that properties listed on Property24, a platform that attracts over seven million users each month, are not only selling faster than before but are also generating a noticeably higher volume of enquiries. This increased activity reflects growing interest from potential buyers across the country. In fact, agents report a 20% spike in viewing appointments and quicker turnaround times for closing sales in Q1 2025 alone.
Although the transition from renting to buying has not yet occurred on a large scale, Naidoo emphasised that the data does point to an encouraging pivot in the market, especially after several years during which the rental sector dominated overall property activity.
Rental inflation, which had outpaced salary growth in major cities, appears to be driving tenants to reassess the long-term value of ownership.
He added that while additional interest rate reductions would likely boost property sales even further, such cuts remain uncertain due to various global economic concerns. Consumer confidence is improving, but cautious lending practices and affordability assessments by banks still pose barriers for many.
Interest Rate Cuts and Global Concerns
Since September 2024, the South African Reserve Bank (SARB) has implemented cumulative interest rate cuts amounting to 100 basis points, citing the country’s relatively low inflation environment. These reductions have begun to create more favourable conditions for prospective homebuyers. This monetary relief has gradually translated into lower monthly bond repayments, making homeownership more accessible to a broader section of the population.
Despite inflation expectations dropping to their lowest point in four years, many economists predict that the SARB may delay any further interest rate reductions. This cautious approach is driven by global instability, particularly ongoing disruptions to international trade flows. The SARB’s monetary policy committee has flagged geopolitical volatility and oil price fluctuations as key risks to their inflation outlook.
Concerns around potential changes in United States trade tariffs and escalating tensions in the Middle East have introduced a degree of unpredictability, making it difficult to forecast the SARB’s next steps. These uncertainties are creating hesitancy among institutional investors, which could indirectly affect property financing and broader economic stability.
Resilience in the Face of High Interest Rates
Even though 2024 saw interest rates reach their highest levels in 15 years, Naidoo maintained that South Africa’s property market displayed notable resilience throughout the period. Despite challenging financial conditions, the sector continued to perform steadily. He pointed out that the local appetite for property investment remains strong, especially among middle-income buyers seeking long-term asset growth.
By the end of 2024, the market had begun to turn, with recorded sales increasing by 6 percent during the final quarter. This upward trend indicated a renewed level of buyer confidence heading into the new year.
Areas such as Centurion, Randburg and Gqeberha reported above-average growth in sales volumes as interest rates estabilised.
However, in the first four months of 2025, the pace of growth slowed slightly, with property sales increasing by 4 percent during this time. Naidoo attributed this temporary deceleration to non-market-related factors, such as the extended holiday period in April and temporary closures of deeds offices in Gauteng. Other contributing factors include administrative backlogs and a brief surge in load-shedding, which disrupted property show days and municipal clearances.
Signs of Movement Back to Gauteng
Naidoo also highlighted that, for the first time in 2024, the Western Cape surpassed Gauteng in terms of property transfer values. This shift came as no surprise, given the consistent trend of South Africans relocating to the Western Cape in search of improved lifestyle benefits and more efficient local governance. Semigration to the Western Cape accelerated post-pandemic as remote work enabled greater residential flexibility and lifestyle prioritisation.
The region continues to be particularly attractive to affluent international buyers, who are often drawn to the comparatively higher living standards the province offers relative to their countries of origin. Luxury real estate in areas like Clifton, Constantia and Stellenbosch continues to attract euro- and dollar-based investors looking for prime value.
Nevertheless, although the Western Cape led in transfer value, Gauteng still recorded the highest number of actual property transfers. This is largely due to its significantly larger population base, which sustains high transaction volumes. Gauteng’s mid-market and affordable housing segments remain active, supported by better transport links and educational infrastructure.
Naidoo remarked that while the luxury property market in Cape Town frequently captures public attention, there has been a noticeable uptick in interest in more moderately priced areas. These areas appear to offer good value for money and are attracting growing buyer activity.
Return-to-Office Culture Revives Gauteng Interest
There is anecdotal evidence to suggest that Gauteng is becoming increasingly affordable, leading to a trend of so-called reverse semigration. More people are choosing to relocate back to the country’s main economic centre, reversing previous moves to coastal regions. This reversal is being driven by a more competitive pricing environment in Gauteng, along with practical work-related needs.
This renewed interest in Gauteng is being supported by several factors, including the re-emergence of office-based work, better employment opportunities, and the lower overall cost of living compared to coastal provinces. The revival of hybrid work policies has made proximity to urban business nodes more relevant again, especially for dual-income households.
A recent report by CareerJunction echoes these findings. Their data shows a noticeable increase in job seekers returning to Gauteng, with close to 60 percent of South Africa’s largest companies headquartered in Johannesburg. Johannesburg continues to be the beating heart of the country’s corporate ecosystem, offering far more head office-level opportunities than coastal counterparts.
Professionals are recognising that opportunities for career growth and access to key business networks are still predominantly located in Johannesburg, which remains the central hub for strategic corporate activity.
Similar observations have been made by other property commentators, including John Herbst, Chief Executive of Fine & Country Sub-Saharan Africa, who pointed out that professionals aiming for senior positions prefer to stay close to company head offices and leadership teams. Johannesburg continues to play a dominant role in corporate decision-making across the country. Herbst noted that even in the age of remote work, physical presence near senior leadership continues to influence promotion prospects and organisational visibility.
Conclusion
South Africa’s property market is entering a transitional period, as declining interest rates and changing work patterns begin to reshape buyer behaviour. The data indicates renewed confidence in purchasing property, particularly in affordable and strategically located areas. While global uncertainties may slow the pace of interest rate relief, the resilience of the market, especially in Gauteng, points to a cautiously optimistic outlook for the remainder of 2025.
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