The property market kicks off this year on a more positive note with a much improved outlook compared to last year. The recent interest rates are already showing an impact. With the anticipation of more rate cuts ahead, we should see higher demand and sales volumes and the potential for higher price growth.
While still operating under global uncertainty due to geopolitical challenges, and a new US presidency, which could impact the economy and potential rate cuts, Seeff expects it to be a good year for property. Bond originators also recently reported an increase in home loan applications in line with the interest rate cuts.
The economic outlook is also improved with the Reserve Bank expecting GDP growth of 1.6% this year. Depending on the inflation outlook, the Bank has indicated that it may reduce interest rates by a further 75 basis points this year which would be a real boost for buyers and the property market this year.
There seems to be plenty for buyers and sellers to be optimistic about. The lower interest rate is a good incentive for buyers to get into the housing market. Higher demand and sales could therefore see stock levels coming down, especially in upcountry areas where slow sales volumes have led to higher stock levels. This could be a good boost for prices.
On the back of this, Seeff expects the market to rerate this year. Firstly, higher demand should boost Gauteng and inland sales volumes with the high stock levels starting to reduce. Once the market becomes more competitive in terms of demand versus stock levels, prices could start rising again compared to the poor performance of last year.
The Western Cape property market will likely continue to lead nationally. The desire to move to the Cape remains strong, and buyers are often only held back by their inability to sell their homes, or economic opportunity. With sustained demand, and the potential of ticking up further against already depleted stock levels, we could potentially see Cape property prices rise even faster.
There certainly are good opportunities for buyers in the market, particularly in Gauteng and the inland provinces where the market has been slow over the last eighteen months. Given that price growth has been so weak, price levels have remained flat for the last two years. This presents good opportunities for buyers to use the lower interest rate and flat prices to their advantage.
The rental market outlook is also positive for the year ahead. According to recent rental barometers, rental vacancies have declined notably from previous years and rental rates have started rising more meaningfully which is good news for landlords and property owners.
Samuel Seeff
Chairman, Seeff Property Group
Author: Gina Meintjes, 17 February 2025, From the Chairman
