The lower interest rate has been a boon for property buyers who are taking advantage of the savings with many areas reporting improved trading conditions compared to the same period in 2024.
We continue seeing a well-balanced market with an increasing number of areas beginning to favour sellers as more buyers enter the market and stocks are depleting. While the lower interest rates and improved consumer confidence are key drivers behind the recovery, more robust interest rate cuts are necessary to further fuel recovery of the market.
Additional concerns are rooted in the domestic and global economic and geo-political environments. Recently, the IMF and Moody’s also downgraded South Africa’s economic growth outlook for this year due to policy uncertainty and the potential impact of the US tariffs.
We therefore continue advocating strongly for further interest rate cuts as a necessary intervention to provide a much-needed boost for the economy and property market. There is an opportunity for a rate cut given that fuel prices have come down, and inflation has declined further to just 2.7% last month. Despite some volatility, the currency has also stabilised.
The recent uptick in the market was largely due to the lower interest rate which boosted increased buying activity across many areas. This has resulted in lower stock levels and shorter selling times, thus providing more opportunities for sellers.
There is still plenty to be positive about for buyers. Aside from the lower interest rate, bank lending conditions remain supportive of the market with above average approval rates, and deposit requirements still favourable. Qualifying buyers are also still able to secure rate concessions in some instances.
House price growth also looks set to improve compared to last year. FNB for example expects price inflation of around 1.7% for 2025, but says this could potentially pick up to 3% in 2026. The increased sales volumes will no doubt boost prices in areas where growth has been flat while Western Cape prices appear set to continue accelerating ahead of other regions.
The rental market remains strong with growing demand. Landlords are achieving good upward growth in their rental income. The main urban areas such as Johannesburg and Cape Town also continue seeing an influx of people in need of rental accommodation which will continue fuelling demand for rental accommodation, good news for investors and developers.
Samuel Seeff
Chairman, Seeff Property Group
