Jonathan Kohler
Landsdowne
Founder and CEO
Landsdowne Property Group (“Landsdowne” or “the Group”), one of South Africa’s largest residential real estate managers and estate agencies, is optimistic about the prospects for the residential market in 2025.
The Group highlights improving market sentiment, rising property demand in Johannesburg and the Western Cape, and the potential impact of further interest rate cuts as key factors contributing to this positive outlook.
Jonathan Kohler, Founder and CEO of Landsdowne commented:
“Demand for buy-to-let properties will remain strong, as many individuals cannot purchase homes now and prefer to use their available funds to pay down debt. However, in select areas of Johannesburg and the Western Cape, driven by semigration trends, we are seeing an increase in buyer activity.”
Kohler said Johannesburg has not seen capital appreciation since 2010, making it a buyers’ market. “This is an opportune time to invest in property in the metro, but many potential buyers are hesitant due to financial constraints and inadequate service delivery,” he said.
An increasing number of buyers, especially young professionals and families, are choosing homes in secure, lifestyle estates, as reflected in the growing demand for these properties.
Buy-to-let investors are picking up value in the market. For instance, a 45m² apartment priced at about R680,000 and renting for R7,000 per month offers net rental yields of 10.27%. Similarly, a two-bedroom, two-bathroom apartment priced at R1.2 million and renting for R9,750 per month yields a net return of 7.36%.
Kohler said KwaZulu-Natal is also a buyers’ market, with established estates like Zimbali capitalising on the strong demand for exceptional lifestyle and secure living options.
The FNB Property Barometer for October highlights a notable uptick in market activity, with Gauteng and the Western Cape seeing a surge, while the Eastern Cape and KwaZulu-Natal recorded more moderate activity levels. The report also suggests that declining home prices in Gauteng may attract more buyers, reinforcing our belief that now is an ideal time to invest in property within the metro, said Kohler.
Semigration to the Western Cape is expected to persist into 2025 as buyers increasingly seek quieter, more peaceful lifestyles. The Western Cape is expected to remain the top destination for semigration, while those searching for better employment opportunities are relocating to Johannesburg. “Many individuals, particularly young professionals, are opting to rent in Johannesburg first before committing to buying property,” Kohler notes.
He said that, with many households still financially constrained, homeownership is not a viable option for most. As a result, renting continues to be a popular choice, as it offers the stability of fixed monthly expenses, protecting tenants from sharp cost increases.
Cape Town remains a sellers’ market, driven by semigration trends, strong capital appreciation and international buyers. “However, investors should proceed with caution, as the market’s growth is not sustainable in the long term. When a correction occurs, prices may become unaffordable for many South Africans,” he warns.
Improved market sentiment and increased activity have led to shorter selling times, with properties now averaging 11 weeks and two days on the market, down from 12 weeks and two days in the second quarter of 2024, according to FNB. This decline was seen across all regions, particularly in the higher-priced segments.
Kohler added that further interest rate cuts in 2025 will help to boost market demand and activity and, hopefully, meaningful property price growth.