Economic upswing for 2025, says Golding

Source: Supplied. Andrew Golding, chief executive of the Pam Golding Property group.

Says Golding: “Positively, although the Reserve Bank remains cautious in the light of upside risks to the inflation outlook, the MPC is expected to reduce interest rates by a further 75bps in total next year (2025), retaining its cautious stance, with the timing of the cuts likely to be influenced by developments internationally by factors such as the oil price, rand and US trade tariffs, among others.

“Sentiment in general has improved, which, together with the two recent repo rate cuts of a cumulative 50bps in 2024 are already creating a ripple effect across the residential property market - increasing uptake particularly in the lower to middle sectors of the market, while also boosting confidence and activity in the luxury market.

“From a Pam Golding Properties perspective, this is borne out by the fact that November (2024) has proven a busy month, with our group sales 19% ahead of transactions successfully concluded in November 2023.

“Furthermore, the banks continue to support the market with competitively priced loans, lower deposits and elevated approval rates, while investors and homeowners will be buoyed by the fact that according to the Pam Golding Residential Property Index, house price inflation in October 2024 of 5.0% - compared to consumer price inflation of 2.8% - translates into real growth in HPI of +2.2%.

“This means we have seen two consecutive months in which national HPI has exceeded the national consumer price inflation rate, as in September 2024 HPI was 4.7% vs CPI of 3.8%, thereby reflecting real growth in HPI of +0.9%.

First-time buyer demand

“This augurs well for continued demand for residential property among investment buyers, primarily driven by the Western Cape but also with a meaningful increase in investment demand in the Eastern Cape since mid-2023 and, more recently, in Tshwane.

“Fuelled by ongoing demand for homes among young, first-time buyers as well as those relocating for a host of lifestyle and other reasons, and coupled with lower interest rates and increased market confidence, there remain sound opportunities offering value-for-money property acquisitions in regions and areas around the country.”

Golding says other key trends which remain in evidence and which will carry through into 2025 include:

• Semigration to other provinces and locations, including coastal towns
• Rising number of female buyers
• Increasing demand for sectional-title accommodation
• Estate living remains sought after nationwide – but particularly in Gauteng
• Growing popularity of mixed-use developments with convenient access to amenities
• South Africans purchasing property overseas for investment and leisure use