12 December 2024

The South African property market in 2024 has been anything but stagnant. With exciting shifts in buyer behaviour, rental trends, and investment opportunities, this year has been a whirlwind of activity and adaptation. From the hustle of urban rentals to the precision of property finance, the experts at the Rawson Property Group share their insights on the trends that shaped the year – and what lies ahead in 2025.

Residential Sales: Highs, lows, and evolving preferences

The residential property market in 2024 has experienced record-breaking activity alongside moments of uncertainty. October marked the highest residential sales month in the Rawson Property Group’s history, but November brought a noticeable slowdown. David Jacobs, National Sales Manager for the Rawson Property Group, describes the year as dynamic and unpredictable.

“External factors like elections and global geopolitical tensions have added an unusual layer of complexity to the market,” Jacobs explains. “Buyers are cautious but still engaged, taking their time to make decisions.”

Demand has been strong in urban hubs like Cape Town and Gauteng. While Cape Town remains a sought-after destination, Gauteng shows promise for significant growth once its municipal infrastructure challenges are resolved. “Gauteng is ready for a resurgence,” Jacobs notes. “We expect substantial growth as soon as service issues improve.”

Shifts in buyer behaviour have also been evident. The work-from-home trend has cooled, with home offices no longer a top priority. Instead, buyers are prioritising homes in areas with high-speed fibre connectivity, reflecting the importance of digital infrastructure in property choices.

However, affordability challenges have hindered first-time buyer activity. “High living costs and financing expenses have kept first-time buyer demand below post-pandemic levels,” Jacobs observes. “The two interest rate cuts in 2024 have provided some relief, but affordability remains a barrier.”

Looking ahead, Jacobs anticipates stabilisation rather than a dramatic boom. “The market is steadying, with pricing structures normalising,” he says. His advice to buyers: “Do your research. Evaluate not just the property but also the area’s infrastructure and municipal support. Long-term value lies in well-serviced locations.”

Residential Rentals: Urban energy meets suburban affordability

The rental market in 2024 has been both dynamic and challenging, with rising prices and shifting tenant preferences. Jacqui Savage, National Rentals Manager for the Rawson Property Group, shares her insights into the drivers of the market this year.

“The demand for rental properties has been phenomenal, particularly in Cape Town, Johannesburg, and Pretoria,” Savage says. “Young professionals, students, and international tenants have been the main drivers, especially in areas like the Atlantic Seaboard, Rondebosch, and Claremont.”

While national average rents reached R8,654 – with the Western Cape averaging R10,300 – affordability has pushed many tenants toward more budget-friendly areas like Parow in Cape Town and Midrand in Gauteng.

Vacancy rates paint a varied picture. The Western Cape boasts some of the lowest vacancy rates nationwide, but higher-end properties in Gauteng have struggled as affordability continues to influence tenant choices. Looking ahead, Savage expects sustained demand for smaller, affordable units and shared housing solutions as tenants adjust to economic realities.

Property Finance: Better rates, smarter moves

The property finance sector in 2024 has been marked by increased accessibility and a renewed sense of optimism. Competitive lending from banks and stable interest rates have created opportunities for buyers.

“This year, banks have actively competed for clients with flexible terms and attractive interest rates,” says Leonard Kondowe, National Manager for Rawson Finance. “However, preparation is still the key to securing the best deals.”

Buyers with deposits and prequalification were well-positioned to benefit from the lending environment in 2024. “A deposit not only boosts your chances of approval but can also significantly reduce your interest rate, saving you thousands over the bond’s lifespan,” Kondowe explains.

The year also saw two 25-basis-point interest rate cuts by the Reserve Bank, bringing the prime lending rate to 11.25%. This reduction eased borrowing costs, offering relief to bondholders while encouraging tenants to consider homeownership.

“Lower rates make property ownership more appealing than renting,” Kondowe notes. “For existing bondholders, it’s an ideal time to put extra funds into your bond to reduce debt faster and save on interest.”

Kondowe advises first-time buyers to borrow cautiously. “Just because you qualify for a certain loan amount doesn’t mean you should stretch your budget to the limit,” he says. “Strategic financial planning ensures you can comfortably manage repayments while achieving your financial goals.”

Commercial Property: Resilience meets innovation

The commercial property sector in 2024 has been a story of resilience and adaptability. Craig Mott, National Business Development Manager for the Rawson Property Group, highlights the year’s standout trends.

“The hybrid work model has significantly influenced commercial spaces,” Mott explains. “There’s increasing demand for flexible workspaces that accommodate both remote and in-office work.”

The industrial and logistics sectors have thrived, driven by the e-commerce boom. Warehouses near major transport hubs in Gauteng and Cape Town remain in high demand, with rental rates for these spaces continuing to climb.

Meanwhile, suburban office spaces are gaining traction as businesses prioritise cost-effectiveness and employee convenience. Urban hubs remain vital for industries like finance and tech, but adaptability is key.

Technology has also played a transformative role. “Smart building technologies, such as energy-efficient systems and advanced security, have become essential,” says Mott. “These features not only reduce operating costs but also enhance tenant satisfaction.”

Looking ahead, Mott predicts increased investment activity in 2025, supported by interest rate cuts and a more stable political climate. “Innovation will continue to shape the commercial sector, and those who stay ahead of the curve will reap significant rewards,” he concludes.

A year of change and opportunity

As 2024 draws to a close, the South African property market has proven its resilience and adaptability, showcasing opportunities across all sectors. From record-breaking sales to innovative rental solutions and tech-driven commercial spaces, this year has set the stage for an exciting 2025.

With stabilising markets, evolving buyer and tenant preferences, and the hope of further interest rate cuts, the future looks bright for those ready to seize the moment. Whether you’re buying, renting, or investing, the coming year offers the perfect chance to turn property goals into reality.