South African residential property prices saw a slight decline in June due to ongoing high interest rates, making house sales difficult. According to the FNB Residential Property Barometer, the House Price Index grew by 0.5% year-on-year, a minor improvement from 0.3% in May. FNB senior economist Siphamandla Mkhwanazi attributed the low house price growth to the persistent high cost of living and borrowing costs.

Lower-priced segments and non-metro regions continued to perform better. Indicators suggest a potential stabilisation in supply and demand dynamics after a period of decline, with cautious optimism for the remainder of the year. The possibility of interest rate cuts and pro-growth policies from the new administration could further support potential buyers and revitalise the housing market.

The FNB 2Q24 Estate Agent Survey indicated low market activity due to election jitters and affordability concerns, although the reading was above recent lows, suggesting a bottoming out between the second and third quarters of the previous year. The affordable housing segment showed higher activity as buyers sought less expensive properties amid elevated interest rates and stricter lending standards.

Longer selling times were noted, with properties staying on the market for an average of 12 weeks and two days in the second quarter, up from 10 weeks and six days in the first quarter. This trend affected all regions and price points, leading to a drop in agent satisfaction from 56% to 51%.

Key motivations behind property sales included downscaling due to life stage (22%), financial pressure-induced sales (21%), relocation within South Africa (14%), and upgrading activity (11%). Emigration-related sales remained stable at 8%, down from the peak in 2019. Despite challenges, the resilience of the affordable housing segment and regional strengths provide some signs of hope.