Bigger interest rate cuts on the cards
Daily Investor:
South Africa’s inflation expectations dropped to 4.6%, nearing the 4.5% midpoint preferred by the central bank, supporting continued interest-rate cuts. November inflation rose to 2.9% due to subdued food-price growth. Governor Lesetja Kganyago stressed caution on rate adjustments amid global uncertainties, with a 25 basis-point cut likely on 30 January.
South African inflation expectations decline to three-year low
Moneyweb:
South Africa’s inflation expectations for the next two years dropped to 4.6%, nearing the central bank’s preferred 4.5% midpoint, supporting gradual interest-rate cuts. Inflation edged to 2.9% in November, with eased food-price growth. Governor Lesetja Kganyago signalled cautious monetary adjustments amidst global uncertainties, including US trade policy and domestic economic pressures.
14-year blow for homeowners in South Africa’s richest city
BusinessTech:
Johannesburg’s residential property market has stagnated for 14 years, with prices stuck at 2010 levels due to unemployment, crime, and poor infrastructure. Demand remains weak, prompting migration to provinces like the Western Cape. Experts suggest further interest rate cuts could help, but structural economic and social challenges require long-term solutions.
The top homeownership trends in 2024 – according to Absa
Property Professional:
Absa’s Homeowners Sentiment Index for 2024 highlights trends including strong solo female ownership (66.6%) and rising first-time buyers (48%). Rental property conversions and alternative energy adoption are growing, while reducing electricity costs remains key. Consumer confidence is stable at 84%, driven by long-term property value belief despite economic and political concerns.
Reserve Bank scared of interest rate ‘regret’
BusinessTech:
South African Reserve Bank Governor Lesetja Kganyago advocates caution in interest rate adjustments, aiming to avoid policy regrets amidst global economic uncertainty. Despite inflation cooling to 2.8% in October, the repo rate remains tight at 7.75%. Kganyago supports lowering South Africa’s inflation target, arguing it is high relative to global peers.
The most expensive provinces for rent in South Africa
BusinessTech:
The Western Cape leads South Africa’s rental market with an average rent of R10,875 and 9.3% annual growth, while national rental growth reached 4.8% in Q3 2024. Improving tenant affordability, falling inflation, and interest rate cuts signal a more stable rental market, with tenants spending under 30% of income on rent.
8 signs you should skip buying a property in SA
BusinessTech:
The South African Reserve Bank’s November 2024 repo rate cut to 7.75% and the prime lending rate to 11.25% is spurring cautious optimism in the property market. However, experts warn buyers to prioritise due diligence by addressing red flags like structural issues, location drawbacks, outdated systems, and overpricing to ensure sound investments.
Red flags for people with home loans in South Africa
BusinessTech:
South African households face mounting financial distress, with mortgage defaults climbing as non-performing loans rose to R304 billion by mid-2024. Debt-servicing costs now consume 9% of disposable income. Nearly 23% of home sales are driven by financial difficulties, highlighting the cost-of-living crisis exacerbated by inflation and rising interest rates.
Bad news for South Africans who own a house
Daily Investor:
Residential mortgage defaults in South Africa have risen sharply, now above 6% of all home loans, nearly double the historical average. Elevated interest rates have pushed household debt-servicing costs to 9% of disposable income. Many households are struggling with rising costs, turning to credit cards, personal loans, or skipping essential payments.
Record-high house prices on the cards
Cape Business News:
South Africa’s residential property market shows robust recovery, with house prices now 39% higher than in 2019. First-time buyer applications rose 30% year-on-year, and Western Cape prices increased by 7.7%. Despite lingering effects of high interest rates, easing inflation and anticipated rate cuts are boosting confidence, spurring further market growth.
Warning for interest rates in South Africa
BusinessTech:
The reelection of Donald Trump and potential US tariffs on BRICS countries could affect South Africa’s economic outlook. Despite inflation at a four-year low of 2.8%, rising US interest rates and currency pressures threaten further cuts to South Africa’s repo rate, currently at 7.75%, while fears over a BRICS currency remain unfounded.
Bad news about inflation and interest rates in South Africa
Daily Investor:
South African inflation dipped below 3% in October but is expected to rebound due to rising electricity tariffs and medical aid costs. Goods inflation, now 1.4%, drove the recent decline, but service inflation remains steady. The Reserve Bank forecasts inflation to average 4% in 2024, with cautious interest rate cuts.
South African consumers remain confident in the property market outlook – ABSA
ABSA:
The Absa Homeowner Sentiment Index (HSI) shows 84% of South Africans remain optimistic about the residential property market, buoyed by two interest rate cuts. First-time buyers drive growth, with buy-vs-rent confidence at 83%. Cautious optimism prevails as house prices show incremental improvement, and inland regions exhibit higher confidence than coastal areas.
South Africans losing their homes
Daily Investor:
The SARB’s cautious interest rate cuts exacerbate economic hardship, with home loan defaults rising to 12.2%, up from 7-8%. Sentinel Homes’ Renier Kriek criticises the Reserve Bank for prioritising inflation targeting despite inflation being below pre-pandemic levels, arguing that more aggressive cuts could relieve financial pressure, stimulate growth, and create jobs.
SARB cuts interest rate: is it too late for South African households?
IOL:
The SARB’s second interest rate cut of 2024 reduces the repo rate to 7.75%, offering minor relief for South Africans facing economic hardships. While beneficial for homeowners and prospective buyers, critics argue the modest 25-basis-point cut is insufficient to address the high cost of living, rising debt, and food insecurity.
Distressing emerging trend for homeowners in South Africa
BusinessTech:
Financial distress is forcing nearly a quarter of South African homeowners to sell their properties, with 23% citing financial pressure in Q3 2024. Mortgage arrears have risen to 7.8%, far exceeding historical averages. Escalating living costs, soaring utility tariffs, and stagnant wages are compounding the strain, challenging homeowners’ financial stability.
RMB launches South Africa’s first ZARONIA calculator
IOL:
The Johannesburg Interbank Average Rate (JIBAR) will be replaced by the ZARONIA benchmark rate in South Africa. This shift impacts JIBAR-linked transactions, including loans, deposits, and derivatives. RMB has launched a ZARONIA Calculator and advisory services to assist businesses in adapting to the new reference rate and mitigating potential disruptions.
Alarming trend emerging for landlords in South Africa
BusinessTech:
South Africa’s rental market in 2024 faces rising squatter rates, climbing to 3.71% in Q2, despite historically low vacancy rates averaging 5.57%. Squatters disrupt cash flow, leaving landlords vulnerable. While tenant payment behaviours have slightly improved, challenges persist, especially among lower-income tenants. Effective management and legal compliance are critical for stability.
Top trends for property buyers and investors to look out for in 2025
BusinessTech:
South Africa’s 2025 real estate market is expected to focus on affordability, sustainability, and innovation. Key trends include efficient urban living, technological adoption, sustainable investments, luxury properties, and economic diversification. Demand spans mid-tier to premium housing, driven by young professionals and international investors seeking returns in an evolving, resilient market.
Big shift coming for South African property in 2025
Daily Investor:
Rental prices in South Africa are set to rise as landlords adjust to higher homeownership costs, tightening rental markets, and low vacancy rates. Subdued housing inflation, averaging 2.7%–3.1% recently, faces upside risks. With falling interest rates making homeownership more attractive, the rent-or-buy debate may shift towards purchasing.
Home Loan Data Shows Resurgence in First-Time Homebuyers
Caxton:
South Africa’s Q3 2024 property market shows signs of recovery, led by first-time homebuyers and supported by easing interest rates, lower deposit requirements, and competitive bank lending. First-time buyers, particularly younger ones, account for 51% of applications, while the Western Cape leads in buy-to-let investments. Consumer confidence is gradually improving.
More interest rate relief coming for households in South Africa
BusinessTech:
The South African Reserve Bank’s expected interest rate cut in November 2024 may bring significant financial relief to homeowners. A projected reduction of 50 basis points could lower monthly bond payments, with savings up to R1,712 on properties valued at R5 million. This easing supports economic recovery amid declining inflation at 3.8%.
Struggling with your home loan? Here’s how banks can help
IOL:
South African homeowners face severe financial pressure due to rising costs and a 67% increase in interest rates since 2021. About 7.2% of mortgage holders are three or more months in arrears, up 20% year on year. Financial experts urge homeowners to engage with banks for potential solutions to avoid repossession.
First-time homebuyers flocking to Gauteng
Daily Investor:
Gauteng leads South Africa in first-time homebuyer activity, accounting for 51% of BetterBond’s loans to this market segment, with Johannesburg’s affordable South-Eastern suburbs attracting buyers. The Western Cape ranks second despite high prices, driven by high demand and options in smaller towns and Cape Town’s northern suburbs. Falling interest rates boost market optimism.
Gauteng and Western Cape: Hotspots for first-time homebuyers in 2024
Property Review:
Gauteng leads first-time homebuyer activity in South Africa, capturing 51% of BetterBond’s loans, with demand high in affordable areas like Johannesburg’s South-Eastern suburbs. The Western Cape follows despite its high prices, spurred by young professionals. Expected interest rate cuts could further boost property market activity among new buyers.
South Africans between the age of 36 to 49 years dominate the residential market
IOL:
Buyers aged 36-49 now lead South Africa’s property market, making up 40% of purchases, up from 37% in 2018. First-time buyer demand has also risen to 51%, bolstered by an improved inflation outlook. Older buyers face shorter loan terms but may secure loans with higher deposits or tailored terms.
Goodbye Cape Town – ‘reverse semigration’ wave hits South Africa
BusinessTech:
Balwin Properties’ financial results highlight a reverse semigration trend, with Gauteng reclaiming its top revenue position at 49%, compared to the Western Cape’s 46%. Despite economic pressures, Gauteng’s affordability draws both local and international buyers, while demand in the Western Cape remains strong, especially in scenic, high-demand areas.
Big changes to interest rates coming soon in SA
BusinessTech:
South Africa’s transition from JIBAR to the data-driven ZARONIA by 2026 aims to improve transparency in financial markets. This shift requires adjustments across loans and derivatives, while a potential interest rate cut by the SARB in November may offer short-term relief, despite external inflationary risks from rising oil prices.
Industry Reports
History of published reports. including FNB Property Barometer and Eighty 20 Credit Stress Report
Q3 ’23: Muted loan volumes; strong approvals – ooba
Bizcommunity:
ooba’s Q3 2023 report shows a cautious homebuying environment due to high interest rates, with muted loan volumes but steady approval rates. First-time buyers’ deposit requirements rose by 25.9% year-on-year, and average purchase prices are up. Demand is shifting to affordable areas, with signs of recovery expected as interest rates ease.
First-time homebuyers to lead the property market’s recovery
Property Wheel:
Q3 2024 data from ooba Home Loans shows first-time homebuyer demand is rising with expected interest rate cuts. First-time buyers, averaging 35 years, now make up 51% of applications with deposit requirements down by 2.9% year-on-year. Western Cape properties remain priciest, while Gauteng South and East offer affordable options.
Alarm bells for middle-class and rich South Africans
BusinessTech:
Middle-class South Africans face severe financial pressure, with nearly half of salary earners left with less than R1,000 or in overdraft by payday. Rising utility, housing, and transportation costs have vastly outpaced inflation, leading to high debt-to-income ratios and challenging the financial resilience of households nationwide.
Big interest rate cut on the cards for November
Daily Investor:
South Africa’s annual inflation dropped to 3.8% in September 2024, reaching the lower end of the Reserve Bank’s 3-6% target range. Lower fuel and stable food prices contributed to this decrease, boosting expectations of a 25-basis-point rate cut in November, amid discussions on further cautious easing by policymakers.
Alarm bells for property owners in South Africa
BusinessTech:
South African property owners face unsustainable financial pressure as property rates and utility costs, especially water and electricity, rise at rates well above inflation. From 2009 to 2024, property rates increased 6.8% annually, electricity 10.5%, and water 10.2%. Poor service delivery amid rising costs worsens frustration and strains homeownership viability.
Rise of retirement property in South Africa
BusinessTech:
South Africa’s retirement property market is small but growing, with around 44,000 formal retirement properties accommodating the country’s senior population. With demand increasing, especially for purpose-built retirement communities, property sales in retirement complexes reached R28 billion over the past five years, highlighting a need for more diverse and affordable options.
Interest rate warning for South Africa
BusinessTech:
South Africans should not expect interest rates to return to pre-pandemic levels soon, with rates likely to remain higher until 2025. While inflation has eased, risks such as global geopolitical tensions persist. South Africa’s economic growth is predicted to rise slowly, from 1.1% in 2024 to 1.8% in 2025.
High interest rates continue to weigh on South African households
Engineering News:
South Africa’s average debt cost burden is at its highest in 15 years, with households now allocating 9.1% of disposable income to debt, a 36% rise in two years. High interest rates, driven by the Reserve Bank’s restrictive monetary policies, have stifled economic growth, reducing demand, employment, and investment.
Discovery Bank eating the Big Four’s lunch
Daily Investor:
Discovery Bank’s new home loan product, launched in May 2024, has seen strong growth, targeting R766 million in disbursements by year-end. Leveraging its shared-value model, Discovery offers competitive interest rates, attracting over 80% of home loan clients from competitors, while also driving sales for other parts of the Discovery Group.
BetterBond Property Brief – how the market is responding to the interest rate cut
Property Professional:
The prime lending rate sits at 11.5%, with a 6% YOY increase in average home prices. Home loan applications rose by 4.5% (QOQ), with a 10% YOY drop in deposits required for first-time buyers. Although high rates have restricted market activity, 2025 may see a recovery.
Financially stressed South African homeowners have options to navigate financial woes
IOL:
Rising costs and a 67% interest rate increase have left 7.2% of South African homeowners in arrears on their home loan repayments, with defaults rising 20% year-on-year. As financial pressure mounts, some homeowners are exploring bank-assisted distressed sales programs to avoid repossession and manage their debt commitments effectively.
Massive property tax headache for South Africa – the 3rd worst in the world
BusinessTech
South Africa ranks as the third-worst country globally for property taxes, with an average rate of 23.12%, according to 1st Move International Removals. High income tax (45%) and increased transaction costs deter investors, despite growing demand for housing. Singapore and Belgium rank first and second, respectively, for the highest property taxes.
SARB governor insists interest rate decisions will focus on domestic factors amid global cuts
IOL:
SARB Governor Lesetja Kganyago reaffirmed that South Africa’s interest rate cuts will follow domestic conditions, despite global trends. The SARB cut rates by 25 basis points to 8% in September, supported by easing inflation. Economists expect gradual rate reductions, with the repo rate potentially reaching 7.75% by the end of 2024.
Good news for homeowners in South Africa
Daily Investor:
South Africa’s property market is showing signs of recovery in 2024 after a three-year decline, driven by improving economic conditions and a potential interest rate-cutting cycle. Home loan applications have risen by 4.5% in the third quarter, though affordability constraints remain due to historically high interest rates.
Good news for interest rate cuts in SA
BusinessTech
South African Reserve Bank Governor Lesetja Kganyago expects inflation to fall below 4% in the coming months, aided by easing global supply shocks. The bank cut interest rates to 8% in September, and inflation is forecast to settle at 3.6% by year-end, benefiting from improved business confidence and a stronger rand.
Relief for South Africans in the next quarter: Nedbank
BusinessTech:
Nedbank anticipates improved credit demand by year-end, driven by lower inflation, falling interest rates, and access to retirement funds through the two-pot system. While household credit remains constrained, corporate credit grew 6.4% in August 2024. Early signs indicate South Africans are managing debt better, particularly in credit card repayments.
Good news for interest rates in South Africa – through to 2026
BusinessTech
Economists predict a gradual interest rate cut cycle in South Africa, following the 25 basis point reduction in September. Another 125bp in cuts is expected by March 2026, with 25bp cuts projected for key meetings. The next cut is anticipated in November 2024, driven by lower inflation and positive sentiment.
The average price of a home in South Africa – Cape Town, Joburg, and more
BusinessTech:
The South African property market shows optimism following an interest rate cut by the South African Reserve Bank. With an average home price of R1.135 million, the cut offers relief to homeowners and potential buyers, reducing borrowing costs and potentially boosting the stagnant property market, particularly outside Cape Town.
Big shift for real estate, restaurants and other services in South Africa
BusinessTech:
South Africa’s real estate, hospitality, and services sectors show a positive outlook, driven by the end of load shedding and a favourable 2024 election outcome. The BER’s Other Services Confidence Index rose to 58 points, indicating increased business confidence despite a decline in overall business volumes, especially in hospitality and transport.
Things are looking up for households in South Africa
BusinessTech:
South African households saw improved financial health in Q2 2024, driven by a 0.9% rise in real personal disposable income. Household debt fell to 62.2% of income, while net wealth increased to 393%. Economists expect continued improvements into 2025, though personal savings remain negative at -1.3%.
The good news flowing through South Africa’s property market right now
Property Review:
South Africa’s real estate sector is set for growth following a 25-basis-point interest rate cut. Property sales have risen, with home loan applications up 3.5% YOY. Economic forecasts predict 2.2% growth next year, aided by large investments and infrastructure projects, boosting job creation and further stimulating the housing market.
Government responds to ‘home loan crackdown’ critics
BusinessTech:
Minister of Human Settlements Mmamoloko Kubayi defended proposed amendments to home loan disclosure laws, focusing on transparency in lending practices. She rejected criticisms that the changes are misdirected, emphasising the persistence of discriminatory practices and the need for financial institutions to comply with existing regulations to foster equitable homeownership.
Economists split on how deep South Africa’s easing cycle will be
MoneyWeb:
South Africa’s 25 basis point interest rate cut has divided economists on future reductions. Goldman Sachs predicts a bold 150 basis point cut, while others expect smaller, gradual cuts. SARB Governor Lesetja Kganyago remains cautious, emphasizing that “adventurism” is not part of their monetary policy, favouring a measured easing approach.
Rate cuts to ease consumer pressure, boost loan activity: Investec CEO
MoneyWeb:
Fani Titi, CEO of Investec, expects global interest rate cuts to boost confidence, loan activity, and ease pressure on consumers. Despite early low activity due to elections, confidence has improved, particularly in South Africa. Investec anticipates headline earnings per share to vary between -1.4% and +3.5% for the period.
Where interest rates are going in the next year
Daily Investor:
South Africa’s first rate cut since 2020 divided economists. The SARB reduced the repo rate by 25 basis points to 8%, with forecasts ranging from a further 150 basis points cut by Goldman Sachs to more conservative expectations of two more quarter-point cuts. Caution and gradual easing remain dominant themes.
SARB finally announces rate cut
IOL:
South African Reserve Bank (SARB) Governor Lesetja Kganyago announced a 25 basis point repo rate cut to 8%, with the prime lending rate dropping to 11.50%. This decision follows a decline in inflation to 4.4%, falling below the SARB’s 4.5% target for the first time since April 2021.
Good news for first-time home buyers as interest rates are set to drop
IOL:
A 25 basis point interest rate cut by the South African Reserve Bank could benefit homebuyers, especially first-time buyers, by reducing bond repayments and boosting market activity. Century 21 South Africa CEO Harry Nicolaides predicts increased property transactions and advises buyers to act on favourable rates rather than waiting for future cuts.
Good news for South African interest rates as US Fed cuts deep
Daily Investor:
The Federal Reserve cut its benchmark interest rate by 50 basis points to 4.75%-5%, marking a shift to support the weakening US labour market. With inflation nearing its 2% target, more cuts are expected, though divisions persist among officials over balancing labour-market recovery and preventing inflation from resurging.
Interest rate surprise for South Africa this week – what experts say
BusinessTech:
Economists expect a 25 basis point interest rate cut by the South African Reserve Bank (SARB), though Gryphon Asset Management predicts a deeper 50 bps cut. Factors like a stronger rand and lower oil prices support aggressive easing, but some analysts warn SARB may prioritise long-term inflation management over short-term growth.
Big turn for property prices in South Africa
BusinessTech:
South Africa’s residential property prices grew for the eighth consecutive month in April 2024, with national annual property inflation reaching 3.9%. While Cape Town and Buffalo City experienced significant gains, Johannesburg faced a decline (-0.7%). Sectional title properties showed mixed results, with freehold properties mostly positive except for eThekwini’s 3.2% drop.
Good news for interest rates in South Africa
Daily Investor:
The Bureau for Economic Research’s third-quarter Inflation Expectations Survey shows that analysts, businesspeople, and trade unions anticipate a decline in inflation, predicting 5.1% in 2023 and 4.8% in 2025-2026. However, household inflation expectations rose significantly, reaching 6.9% for one-year-ahead and 10.6% for five-year-ahead forecasts.
FNB Property Barometer – September
FNB:
Global inflation decline prompts central banks to signal rate cuts, with South Africa potentially lowering rates in 2024. FNB’s House Price Index showed slower growth in August, with a year-on-year rise of 0.8%. Rising costs and weaker affordability have reduced homebuying activity, especially in lower-priced brackets.
Glimmer of hope for property in South Africa
BusinessTech:
FNB expects a more positive housing market outlook due to lower inflation and interest rate cuts. Headline inflation dropped to 4.6% in July, the lowest in three years. FNB predicts GDP growth of 1.0% in 2024, and the repo rate could decrease to 7.50% by 2025, improving affordability and demand.
Positive turn for coastal property in KZN
Businesstech:
KwaZulu-Natal’s Mid-South Coast property market is experiencing a revival, driven by increased buyer interest, particularly from expats. Demand for move-in ready homes priced between R700,000 and R1.2 million has spiked post-elections, boosted by local developments and infrastructure projects like the Renishaw Coastal Precinct and uMkhomazi Water Project.
‘Reverse emigration’ hitting Joburg
BusinessTech:
The Gauteng property market saw robust recovery in 2024, with increased enquiries and strong post-election activity. Expats and foreign buyers are showing renewed interest, particularly in sectional title properties. Demand remains high for homes priced between R8,000 and R35,000 per month, with notable activity also in higher-priced properties.
What you need to earn to afford the average house price in SA
BusinessTech:
South Africa’s rising property prices continue to outpace income growth, with the average house costing R972,200. To afford this, individuals need to earn R35,120 per month, R8,329 above the national average salary. The Western Cape leads with the highest property prices, requiring a monthly income of R58,200.
Big turn for BEE in South Africa’s property sector
BusinessTech:
Sakeliga announced a win for South African property practitioners as the Property Practitioners Regulatory Authority (PPRA) reversed its decision to enforce BEE compliance for issuing Fidelity Fund Certificates (FFCs). The PPRA will now accept non-compliant BEE certificates, easing requirements for property professionals, though other regulatory challenges remain.
Alley Roads kicks off R10bn KZN residential estate
Moneyweb:
Alley Roads has begun construction on the R10 billion Palm View Estate in Shakaskraal, KwaZulu-Natal. Spanning 450 hectares, the development will offer over 6,000 affordable housing units. The project, to be completed in phases, includes eco-friendly homes, a retirement estate, lifestyle amenities, and will create 10,000 jobs.
Rate cuts predicted to boost homebuyer confidence and market activity soon
Bizcommunity:
Despite unchanged interest rates for 14 months, experts predict a rate cut in Q4 2024, potentially boosting South Africa’s housing market. Gavin Lomberg of ooba Home Loans foresees increased homebuyer confidence, particularly among first-time buyers and Gen Z investors, with lower rates stimulating competitive bids and enhancing affordability across the property sector.
The worst is probably over for loans in South Africa: Nedbank
BusinessTech:
Credit demand in South Africa weakened further in July, with private sector credit extension (PSCE) growth dropping to 3.5%. Despite the current slowdown, Nedbank forecasts improvement as lower inflation, interest rate cuts, and the introduction of the two-pot system boost disposable income and consumer confidence, expecting credit growth recovery by August.
Banking Association following discrimination in home loans remarks
The Citizen:
The Banking Association South Africa (Basa) has refuted Minister Mmamoloko Kubayi’s claims of racial profiling in home loan approvals. Basa stated that banks follow affordability criteria and are not driven by race, while emphasising their responsibility to safeguard depositors’ funds and ensure responsible lending under the National Credit Act.
Young females are making their mark when it comes to homebuying
Bizcommunity:
In South Africa, homebuying trends show a rise in young female buyers, particularly those aged 26–30, who now account for 14% of female homebuyer applications. Many are purchasing homes independently, with a preference for freehold properties. Investment property demand has also increased, especially among women aged 18–30.
Durban woman reclaims home after bank illegally sold it at auction
Moneyweb:
The Durban High Court ruled that SA Home Loans unlawfully sold and transferred Valerie Naidoo’s home, overturning the 2021 auction where her R800,000 house was sold for R100,000. The court reinstated her title deed, criticized the bank’s conduct, and ordered SAHL to reimburse the buyer’s legal and transfer costs.
Good news for South African homeowners
Daily Investor:
South Africa’s property market is set to improve due to anticipated interest rate cuts and increased bank lending. Standard Bank and Capitec foresee renewed growth as inflation eases, boosting consumer confidence and loan demand. Despite recent challenges, long-term trends suggest resilience and potential recovery in the residential property sector.
What a R1 million house is worth today if you bought in 2019
BusinessTech:
Residential property prices in South Africa rose by 23.8% over five years, with the Western Cape leading at 35.5%. However, inflation-adjusted values show a national decline of 3.9%. The Western Cape remains the only province with real price growth, while others, including Gauteng, underperformed, with several provinces experiencing declines.
Home loan crackdown in South Africa
BusinessTech:
South Africa plans to amend the Home Loan and Mortgage Disclosure Act to require banks to disclose more information on mortgage lending, aiming to improve access to home loans for previously disadvantaged citizens. The changes will allow state investigation of consumer complaints and increase penalties for non-compliant lenders.
Housing market remains subdued but green shoots start to show
IOL:
The South African housing market showed muted growth in Q2 2024 due to election uncertainty, despite a 7% rise in listing prices. Registered sales rose 4.95%, reflecting delayed transactions. Building activity weakened significantly, with a 13.4% drop in passed plans and a 17.2% decrease in completed buildings compared to 2023.
Bad news for property in these areas
Daily Investor:
South Africa’s property market sees varying growth across provinces, with the national Residential Property Price Index (RPPI) rising by 3.5% in March 2024. The Western Cape leads with a 7.7% increase, while the Northern Cape and Limpopo faced declines. Despite challenges, there was a 6.7% rise in new home loans.
Turn coming for property in South Africa: Standard Bank
BusinessTech:
The South African residential property market has faced challenges due to high interest rates, leading to a sharp decline in home loan applications. However, Standard Bank is cautiously optimistic about recovery, expecting interest rate cuts by the SARB, which should boost buyer confidence and stimulate loan applications moving forward.
Great news for landlords in South Africa
BusinessTech:
In Q2 2024, South Africa’s national average rent rose to R8,785, R410 higher than Q2 2023. The Western Cape remains the most expensive province with rents at R10,673. National rental growth increased to 4.9%, surpassing inflation for the first time since 2019. Provincial differences in supply, demand, and economic factors influenced growth.
FNB property barometer for August 2024
FNB:
Global inflation is easing, allowing central banks to halt rate hikes. In South Africa, interest rates have peaked, with cuts likely in late 2024, though risks persist. Global house prices are moderating due to inflation and debt costs, while in South Africa, house price growth slowed, with mortgage volumes and bond amounts declining.
More women own property than men
IOL:
Women now dominate the South African property market, owning 38% of properties compared to men’s 29%, according to Lightstone. Female-only buyers surpassed male-only and couple buyers since 2016. However, women typically purchase lower-value properties, with most female-owned properties valued under R750,000, and the price gap has widened since 2020.
Renters in South Africa taking pain
BusinessTech:
Rental prices in South Africa have surged, with the national average rising from R6,247 in 2014 to R8,654 in 2024. Tenants now spend 26.6%-30% of their income on rent, up from 20%. Provinces like the Western Cape saw a 55.9% rent increase, highlighting the growing cost of living crisis.
The best time to sell a property in South Africa
BusinessTech:
Seeff Property Group advises that summer is the best time to sell properties in South Africa. Warmer weather, better moods, and more buyer activity contribute to increased transactions. Sellers should price their properties competitively and ensure they are in good condition to attract buyers, as it remains a buyer’s market.
Good news for property owners in South Africa – except in three major cities
BusinessTech:
The latest Residential Property Price Index from Stats SA for March 2024 shows a 3.5% national house price inflation, up from 3.1% in February. While property prices are rising nationally, driven mainly by the Western Cape, some metros like Johannesburg and eThekwini face declines. First-time buyers may struggle with increasing prices.
Older women the fastest-growing segment in residential property market
IOL:
Women over 55 are the fastest-growing property owners in South Africa, with single women increasingly buying homes, especially freehold properties in the R500,000 to R1 million range. Women now make up 53% of property buyers, driven by the desire for stability, providing for family, and adjusting to life expectancy changes.
What millennial and Gen Z buyers want from property in South Africa
BusinessTech:
The South African housing market is evolving with millennial and Gen Z buyers driving demand for affordable, sustainable, and tech-forward homes. Prioritising urban living, flexibility, and green features, these generations influence property types, locations, and real estate processes. Affordability, safety, and advanced security are also critical for younger buyers.
Good news for South African interest rate cuts next month
Daily Investor:
The Federal Reserve’s signal to cut interest rates in September may prompt the South African Reserve Bank to ease its monetary policy by late 2024. Lower US rates can positively impact South African markets, encouraging the Reserve Bank to lower its rates, which could relieve indebted households and businesses.
Female buyers are dominating the <R750 000 property market
Property Wheel:
Women are outpacing men in property ownership in South Africa, accounting for 38% of property ownership and co-owning another 33%. Despite this, they purchase lower-value properties compared to mixed-gender couples. The trend shows women dominating the less than R750k price band but trailing in higher price bands, with all buyers purchasing later in life.
The province in SA where homeowners are taking a big hit in 2024
BusinessTech
In Q2 2024, KwaZulu-Natal experienced a double-digit drop in residential property prices when adjusted for inflation, recording -11.4% and -12.3% declines for first-time and repeat homebuyers, respectively. Nationally, house prices showed nominal growth but negative real growth. Service delivery issues and rising costs are significant factors impacting property values.
Estate agents face new B-BBEE hurdles
Bizcommunity:
The PPRA’s new B-BBEE rules require businesses with over R2.5 million turnover to achieve at least 40 BEE points for a valid Fidelity Fund Certificate. This highlights the importance of B-BBEE compliance, with preferential procurement practices significantly impacting scores. Partnering with Level 2 B-BBEE suppliers, like Lightstone, can help estate agents meet these requirements.
Q2 2024 oobarometer data signals market turnaround with surprise Gen Z buyers
Everything Property:
ooba Home Loans’ Q2 2024 report highlights a steady recovery in South Africa’s property market, with young buyers (18-25) increasingly investing in homes. While first-time homebuyer activity has dipped, younger buyers show increased spending. The Western Cape leads in price growth, and banks remain competitive, driving positive outcomes despite high interest rates.
Bad news for South African homeowners
Daily Investor:
South African house prices grew by 0.4% nominally in Q2 2024 but fell in real terms due to inflation, per Rode’s Report. The Western Cape led in quick sales, while Gauteng lagged. Interest rates remained unchanged, yet cuts are expected in September. National flat vacancy rates fell to 6.7%.
Good news for inflation and interest rates
Daily Investor:
South Africa’s inflation rate slowed to 5.1% in June 2024, a six-month low, potentially prompting the central bank to consider interest rate cuts. The Reserve Bank’s policy committee left rates at 8.25%, with a split vote indicating a possible shift towards easing later this year. Key contributors included slower rises in food and transport costs.
The only province in South Africa where homeowners are winning big in 2024
BusinessTech:
In Q2 2024, the Western Cape saw the only inflation-adjusted growth in residential property prices in South Africa. National and first-time homebuyer prices rose nominally by 2.3% and 2.7% respectively, but real growth remained negative due to inflation. Western Cape property prices rose by 7.8% for first-time and 6.3% for repeat buyers.
Interest rate cuts anticipation spurs first-time home buyer resurgence: Standard Bank
Property Review:
Despite high interest rates, Standard Bank reports a resurgence in first-time homebuyer activity in South Africa, driven by anticipated rate cuts. In May 2024, 50% of Standard Bank’s home loans were to first-time buyers. The average loan approved was R975,000, with Gauteng, Western Cape, and KwaZulu-Natal leading in activity.
South African Homeowners’ Appetite for Alternative Power Waning
ABSA:
Absa’s Homeowners Sentiment Index (HSI) for Q2 2024 reveals reduced interest in alternative power solutions due to stable electricity supply since March. However, reducing electricity costs remains crucial for 69% of homeowners. Consumer confidence in the property market rose to 84%, with sustainability and financial guidance being key trends.
Housing prices soften in June as interest rates slow buying activity
IOL:
In June, South African residential property prices softened slightly due to declining demand amid high interest rates. The FNB House Price Index grew by 0.5% year-on-year. Lower-priced segments and non-metro areas performed better, while the market showed signs of stabilisation, with cautious optimism for the rest of the year.
Bad times for first-time buyers in South Africa – but there’s a catch
BusinessTech:
Contrary to some estate agents’ beliefs, Standard Bank data shows a resurgence in first-time homebuyer activity in South Africa, with nearly half of May’s home loans taken by first-time buyers. While tighter lending standards and economic challenges persist, increased use of unsecured loans and government subsidies are helping young buyers enter the market.
Good news for South African homeowners
Daily Investor:
First-time homebuyer demand in South Africa is rising, driven by anticipated interest rate cuts and economic conditions. Standard Bank reports nearly half of May’s home loans were for first-time buyers. Increasing demand could drive up property prices, signalling a recovery after declining activity in 2023 and early 2024.
South Africa’s 833% house price pain
BusinessTech:
Since South Africa’s democracy began, average property prices have surged by over 833%, far outpacing inflation. Lightstone Property’s report shows varied property inflation rates across regions and value bands. Coastal areas, driven by semigration and foreign buyers, experience stronger growth, while high interest rates and financial strain impact home-buying and loan repayments.
Big interest rate changes expected next year
Daily Investor:
South Africa’s benchmark interest rate, JIBAR, will be replaced by ZARONIA in 2025, promising more accurate and transparent interest rate calculations. ZARONIA, based on actual overnight transactions, will enhance market stability and integrity. Financial institutions must prepare for this shift by updating systems, valuation models, and renegotiating existing contracts.
Landlords are winning in South Africa
BusinessTech:
In Q1 2024, South Africa’s national rental vacancies hit historic lows, with demand far surpassing supply. The TPN Vacancy Survey Report reveals a decrease in homeownership and a rise in rental households, driven by high interest rates and economic uncertainty. Landlords benefit from low vacancies and positive rental growth.