PROPERTY NEWS - According to the latest figures from Lightstone’s Property Index, national year-on-year house price inflation has maintained a modest pace of 2.8%.
This steady, albeit sluggish, trend is echoed in the RE/MAX National Housing Report for Q1 2025, which reveals a 2.1% increase in average house prices compared to the same period in 2024.
With Consumer Price Inflation (CPI) sitting close by at 2.7% as of March 2025, these figures paint a nuanced picture of South Africa’s residential property landscape.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, comments that while the national average paints a broad picture, regional disparities offer deeper insight. For example, according to the RE/MAX National Housing Report for Q1 2025, the Western Cape is averaging growth at around 7.4%, significantly outperforming the national average.
In contrast, Gauteng, South Africa’s economic hub, lags considerably at -2.5%. “With these disparities, it can sometimes be an oversimplification to talk about property market performance for South Africa as a whole,” he notes.
However, for homeowners who find themselves living in the slower markets, especially those who purchased property in recent years, the current figures may be underwhelming. With house price inflation barely outpacing or matching consumer inflation, real growth in property value remains minimal. “In times like these, its important to remember that real estate generates the best returns when viewed as a long-term investment,” says Goslett.
He goes on to add that sellers are likely to feel the pinch most acutely. “The minimal growth in property values compared to inflation puts downward pressure on asking prices, especially in oversupplied or low-demand areas. This may mean that sellers end up with less than they were hoping for,” says Goslett.
The good news is that slow house price growth is not expected to last forever. “There are already early signs that semigration towards the Western Cape might be coming to an end, which should hopefully see activity restore in provinces like Gauteng and KZN. Once demand picks up, house prices will strengthen in these areas,” he explains.
At the macro level, Goslett notes that the South African property market remains in a state of equilibrium. “Marginal month-on-month increases suggest that while there is no sharp decline, there’s also little dynamism. Stability is not necessarily a bad sign—especially after the volatility of previous years—but South Africa as a whole could benefit greatly from stronger economic growth to stimulate broader property demand.”
“That said, this period of steadiness offers a solid foundation for recovery, providing an ideal environment for buyers to enter the market with confidence and for investors to adopt long-term strategies rooted in sustainable growth,” Goslett concludes.
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