Property market predictions: What to expect in 2025

As we approach 2025, the South African property market stands at a crossroads, influenced by a mix of global economic trends, local policy decisions, and shifting consumer behaviour. From interest rate fluctuations to the growing uncertainty around global economic policies, the year ahead promises both challenges and opportunities for property buyers, sellers, and investors.

The Monetary Policy Committee, last month, announced that interest rates will be lowered by 25 basis points. The prime lending rate therefore changed to 11.25%, and the repo rate dropped to 7.75%.

Homeowners: How the interest rate cut affects your financial planning:

With the interest rate drop of 0.25 points, it's crucial to understand how this adjustment will impact your finances for better financial planning in the future.

To help you navigate this change, Property24 has introduced an Additional Once-Off Payment feature in the additional payments calculator tool, allowing you to understand how the rate cut can benefit your financial circumstances.

To access this feature, simply navigate to the Property24 Additional Payments Calculator under the Calculators tab.

This additional feature is designed to help you estimate the financial impact of the rate change on your existing bond. By entering your current bond debt amount, current bond repayment, additional monthly payment, once-off payment, and interest rate details, you can assess how your payments and overall costs are affected.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, predicts that "there will be slow and steady reductions in the repo rate throughout 2025 - probably roughly 1.25% down between now and Dec '25. This will lead to an increased buyer pool from both first-time buyer as well as investors. It should also create some breathing room for existing homeowners with home loans."

Adding to this, Goslett predicts that the Western Cape will continue to provide safe and steady returns - albeit at a premium entry price. "There is value to be had in Gauteng and KZN over the next 6 months. Once interest rates come down and buyer demand goes up, the opportunity for value home purchases may continue to exist for a while, but the availability of value-priced homes will become significantly reduced as sellers expect higher offers as the demand increases," he states.

Sharing his final thoughts on what lies ahead, Goslett notes that "with the likelihood of improved market conditions, those who work within the real estate industry will only be willing to stay with a real estate brand that offers value. Whether that's a franchise, a brand or an independent agency - the value it offers in the form of training, market share, access to stock, brand power, and back-office support will determine whether an agent is willing to pay for those services through their commission splits or fixed fees. If an office doesn't add value, the agents will, in all likelihood, find alternative offerings that do," he says. 

For most South Africans, property investment is one of the largest financial decisions they will make. With South Africa's unique property market, characterised by regional variations and economic fluctuations, it's essential to adopt a strategic approach to avoid overpaying and protect long-term investment value. Antonie Goosen, founder and principal of Meridian Realty, recently shared insights on how to ensure you're paying a fair price for property in South Africa.

He advised that prospective buyers assess a property's worth to ensure they're paying a fair price:

"An effective starting point is to compare similar properties in the target area to get a feel for price trends," says Goosen. "Conducting a comparative market analysis involves looking at recent sale prices of comparable properties within the same neighbourhood. By establishing a benchmark, buyers can make well-informed offers that reflect realistic market conditions." This research is particularly helpful in areas where property prices are volatile or seasonal. Observing trends over time enables buyers to recognise whether a property is fairly priced or overvalued.

Beyond neighbourhood comparisons, the physical condition of the property can dramatically impact its value. While a property may look pristine, it's essential to evaluate any hidden structural issues or maintenance needs. "It's crucial to inspect the property thoroughly and, if possible, hire a professional to assess its condition. The cost of repairs or upgrades should be considered when negotiating the final price," Goosen explains. "Often, sellers may try to add value through aesthetic upgrades, but buyers need to look beyond these cosmetic changes to understand the true worth." Factoring in these potential costs will ensure that buyers don't face unexpected expenses post-purchase, which could otherwise compromise their investment.