HEIBERG ESTATES NEWSLETTER: AUGUST 2025

Dear Property Partners

With the latest and third interest rate cut this year by .25 basic points, it will hopefully increase Buyers confidence and demand in properties. Higher demand and increasing property prices – which at the moment is around 3.7% – will also motivate Sellers to put their houses on the market to be sold. We are virtually sold out and we urgently need stock due to demand that has been exceeding supply for some time now.

We are expecting the end of the rate cut cycle as it is unlikely that any further cuts will follow this year. Firstly, because of growing political- and economic uncertainties not only on our home front but also internationally, putting downward pressure on economies and forcing inflation upwards. Secondly, because the SARB indicated that it is moving forward with its inflation expectations towards a newly preferred 3% anchor and not the 3% to 6% guideline that has been the broader aim for some past years now. Thirdly and realistically, especially with the latest inflation announcement where it has increased to 3.5% in July – the highest in 10 months since September last year when it was 3.8%. (The worldwide inflation rate is expected to be around 4.2% this year).

The impact of one of our biggest trade partners, the USA 30% tariff hike still has to be factored into the way ahead with further potential job losses expected and with immense downwards pressure on our already very low overall economic growth rate, which will further escalate into our property market and limit affordability. Our economic growth rate for 2025 is at this stage estimated at a mere 1%, whilst the worldwide expectation is around 3%. There is synergy between trade and the property market where interaction stimulates economic activity, job creation and property interest.

With the latest headwinds we are facing, SA is forced to look for other trade alliances which in turn will be positive for potential foreign investments in our property market, especially with BRICS countries where high net worth individuals are increasingly investing in our luxury home market, capitalising on our excellent affordability in comparison to property prices abroad and within the most beautiful environments that the world can offer, like the Atlantic Seaboard and our West Coast. Hopefully, our Government will realize that Real Estate being one of the biggest contributors to the state coffers through transfer duties, rates and taxes, can only boom with stable policies, investment in and developing infrastructure, as well as a progressive visa and residency regime to specifically attract foreign investment interest to our property market.

Everybody is aware that real estate is proven to be a safe and profitable investment on the long term, irrespective of economic fluctuations. Global trade tensions disrupt trade and thereby have a negative impact on real estate, as also clearly demonstrated during the 2018 US-China trade war. Also looking at a recent Knight Frank Wealth Report where it confirms that every G20 nation has failed to meet its annual housing target for the past five years.

Our Commercial property sector is busy picking up momentum, especially after the formation of the Government of National Unity, the gradual lessening of load shedding and after several interest rate cuts – offering higher yields, longer leases, declining vacancies and where investment volumes increased by 34% since 2023. But we also have to take into account that commercial property is cyclical with different asset classes performing differently depending on where they are in the cycle or specific circumstances – e.g just look at the excellent performance of warehousing and industrial properties during the Covid-19 period, whilst residential sales virtually stagnated during and immediately after this period!

Some of the latest interesting facts and statistics, as follows:

• Our unemployment rate now is 12.2% amongst graduates, whilst 8.4million people that can work are unemployed which is an alarming 33.2% of our workforce. These statistics further have a ripple effect throughout our property market whether it is to let or to buy.
• A recent FNB Report points out that the House Price Index averaged 3.7% year-on-year in July, and house prices are now rising faster than inflation which indeed is great news!
• The average time on the market before being sold improved during the last quarter of last year from 11.2 weeks to 11 weeks, but just to fall back again to 12.1 weeks as recorded during the first quarter this year. This fluctuation is perceived as cautious optimism rather than sustained momentum with so many headwinds and economic pressure continuously challenging our property market.
• FNB also reports that sectional title properties with a clear shift in buyer sentiment, are becoming increasingly popular that reflects evolving lifestyle benefits and security preferences, as well as affordability constraints – this illustrated by average price increase year-on-year recorded at 3.8% – higher than freestanding properties. However, supply constraints remains where building plans approved by municipalities for new flats and townhouses, declined by 21.2% year-to-date – reflecting developer caution amid regulatory delays, rising building costs, coupled with inadequate municipal service delivery.
• Ooba reports that the year-on-year increase in home loan applications recorded over the past quarter, was 11% which reflects improved affordability and buyer confidence.
• BetterBond reports there were remarkable signs of recovery over the past few months and their home loans granted, up by 13.6% – illustrating renewed buyer confidence and a more stable market environment.
• Companies are now returning their employees to an office environment after the Covid-19 work-from-home trend and thus also downwards impacting on the demand for bigger homes with workable office space, whilst stimulating and reducing vacant Office space.
• According to the SAPOA’s Office Vacancy Report Q1 2025, the office vacancy rate reduced to 13.6% which is good news as lower vacancies are an indicator of returning and increasing market activities. Prime-grade offices did the best with vacancies reducing by 80 basic points to 6.8% – the lowest level recorded since the vacancy peak in mid-2022. Johannesburg Metro still remains to be the city with the highest overall office vacancy rate in South Africa.
• On the Retail front it is reported that while growth is slowing, retail turnover is outperforming broader economic indicators which is positive for property owners. SAPOA reports that vacancy rates across major centres have improved very well from the 2021 peak, and recorded at 4.9% at the end of the first quarter this year which is slightly up from the 4.5% recorded during the last quarter of the previous year.
• Industrial property still outshines the other commercial sectors with the growing demand from e-commerce, logistics and manufacturing sectors. The latest Rode State of the Property Market Report data clearly points out that it outperformed the office and retail sectors with strong rental growth and low vacancy rates.

We are all hoping for continued lower prime rates, coupled with more job creation, steady economic growth and stable inflation to support and stimulate our property market. With the latest modest interest rate cut that boosts investor confidence and with the property market entering the traditional busiest yearly cycle soon, it will assist in creating a more growth-friendly property environment with increasing sales and moderately rising property prices expected until the end of the year. Our residential market is widely acknowledged as a cornerstone of economic stability and as a proven safe haven to put your hard-earned savings in. The strongest activity is to be continued in the R3m to R5m bracket nationally.

In full recognition of our property market positioning itself within a wide range of political- and economic uncertainties, great opportunities remain, especially for those property investors that do proper research, thorough due diligences and under the guidance of well-seasoned and established real estate agents whilst making well-informed property investment decisions. As well as taking into account where new infrastructural upgrades are in process, as well as new business precinct developments taking place with special economic and emerging growth nodes that will attract property investors. One needs to identify where investment is growing and align with that momentum.

It is never too late to invest in property and with the slow recovery in our property market and the increase in demand, it is wise to commit rather sooner than later. Our resilient SA Property Market is slowly, cautiously and gradually strengthening whilst living up to its status to be a safe-haven investment for your hard-earned money! So don’t hesitate to call YOUR HEIBERG ESTATES TEAM that remains to be on 24/7 standby whatever your property needs might be. Kindly scan the OR-code to visit our website:

With best and warm regards.

Bambie & your Heiberg Estates Team