It seems as though the impact of the rate cutting cycle, which started in September last year, is starting to reflect on how the local housing market is performing.
Image: Simphiwe Mbokazi
The data from the final quarter of last year paints a promising picture for property market performance in 2025.
After contracting in the previous quarter, the overall property market is now said to be making a recovery, growing by 0.33% compared to the same quarter last year.
Adrian Goslett, Regional Director and CEO of RE/MAX Southern Africa, said it seems as though the impact of the rate-cutting cycle, which started in September last year, is starting to reflect on how the local housing market is performing.
"Despite the overall market growing by just 0.33% last quarter, our RE/MAX network has surged ahead – with a 16.33% increase in registered sales value quarter-on-quarter and a 7.03% rise compared to last year.
"This performance truly highlights our strength and the trust our clients place in us,” Goslett said.
He said: “Year-on-year, our network is also up by 11.39% in reported sales, which paints a promising picture of what Q1 2025 might have in store for the local property market.”
Provincial and suburb trends
The Western Cape continues to be one of the most desirable provinces, claiming four of the top five positions for the most searched suburbs on remax.co.za.
Top 5 most searched suburbs on remax.co.za:
Across the board, RE/MAX said it has a higher average house price than the national average. The average active listing price on remax.co.za in the last quarter of 2024 is R2 950 093.
Unsurprisingly, the Western Cape also continues to be the highest priced province at a provincial average of R1 730 225.
This quarter, KwaZulu-Natal, with a provincial average of R1 248 923, edged out Gauteng at R1 065 800.11 to secure second place.
“Overall, Gauteng seems to be the slowest to react to the interest rates drops. It will be interesting to see how the province recovers in the first quarter of 2025,” Goslett said.
“As the interest rate environment continues to shift, the positive trajectory of the property market could further strengthen in the coming months, presenting opportunities for buyers, sellers, and investors looking to navigate the evolving real estate sector.
"Those who want to take advantage of the slow growth we’ve previously experienced should act now before the national property prices make a full recovery,” Goslett said.
Meanwhile, building sentiment, as measured by the FNB/BER Building Confidence Index, saw a marginal improvement to 41 in the first quarter of 2025 compared to 40 in 2024.
The current reading means that the majority (almost 60%) of respondents are dissatisfied with prevailing business conditions.
The results were mixed in terms of activity but, overall, reflected a sector which saw a slight worsening in current work.
Near-term prospects for work, however, are encouraging from both contractors’ expectations and also from the better activity reported by architects, which reflects the building pipeline.
Siphamandla Mkhwanazi, senior economist at FNB, said contractors seem to be anticipating more work over the next few months and this, in part, sustained sentiment.
“However, this does pose a risk to the business mood should these expectations not materialise, which our initial reading of the broader demand drivers suggests is possible.
"In addition, delays at the municipal level again seem to stand out – in the comments to the survey - as a crucial hindrance to faster development, specifically in preparing work and plans for construction, further highlighting the risks to the optimistic near-term view,” Mkhwanazi said.
Compared to the last quarter of 2024, the following changes to sentiment were registered: hardware retailers (+9), quantity surveyors (+4), building sub-contractors (+3), building material manufacturers (-2), architects (-4) and main contractors (-6).
Despite a deterioration in activity and profitability, which weighed on sentiment this quarter, building contractors are optimistic about prospects for activity, employment, profitability and general business conditions next quarter.
“While such optimism is encouraging, the risk exists that sentiment will fall further if these expectations do not materialise,” Mkhwanazi said.
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