2025 Residential Property Trends: A turnaround in the making

• Interest rate cuts boost demand from middle-income first-time homebuyers, especially those aged 35+, with more bargaining power in the market.
• Off-plan properties are set for a comeback, offering benefits like no transfer fees, increased security, and access to sought-after locations.
• Gen Z, now aged 27+, is entering the property market, focusing on affordable options like fixer-uppers, co-buying, and sectional titles.

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After a challenging 2024 for South Africa's residential market, marked by high interest rates and economic uncertainty, signs point to a shift in 2025.

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Grant Smee, CEO of Only Realty Property Group, highlights improved sentiment following interest rate cuts and economic stabilisation.

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KeyTrends for 2025:

1. Interest Rate Cuts Boost Middle-Income Buyers
   As rates drop, middle-income first-time buyers, especially those aged 35+, are expected to drive market activity. With more affordable options and bargaining power, they’re poised to enter the market.
2. Off-Plan Properties Make a Comeback
   While 2024 saw subdued demand, 2025 is expected to bring renewed interest in off-plan properties, especially for first-time buyers. These properties offer benefits like no transfer fees, security, and desirable locations.
3. Gen Z Enters the Market
   With the oldest Gen Z now 27, this financially-conscious generation is expected to embrace affordable property options like fixer-uppers, co-buying, and sectional titles as investment opportunities.
4. Short-Term Letting Faces Challenges
   The demand for short-term lets surged in 2024, but with higher property prices and new pending regulations, Smee predicts that the Western Cape’s market could slow in 2025.
5. More Renovations and Extensions
   Lower bond repayments could fuel a wave of home renovations and upgrades as homeowners look to add value and increase sale prices.

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Smee concludes that while areas with high property supply may take years to recover, 2025 looks promising across many regions, with a potential shift to a seller’s market in sought-after pockets.