HEIBERG ESTATES NEWSLETTER: FEBRUARY 2025

Dear Property Partners

There was another glimmer of light at the end of the tunnel for our SA Property Market when the SA Reserve Bank announced another interest rate cut at the end of last month, bringing the prime interest rate down to 11%.

Unfortunately, new and unexpected challenges to our Property Market occurred with the new Expropriation Act recently signed by President Ramaphosa – but it is still important to note that it is not called the “Expropriation without Compensation Act”. The new Bill, causing widespread concerns is in place now, replacing the original law of 1975 and clearly defines the circumstances and specific conditions to which the State must adhere to in order to expropriate land. It is not all doom and gloom when looking at the fine print as it does not put registered property owners of land, residential and commercial properties in South Africa at risk of expropriating their properties without compensation. This act stipulates strict and specific conditions that must be met by the State in justification of any expropriation in a clearly outlined process that needs to be followed and completed. There are several steps to be taken to determine a fair and equitable compensation offer and to negotiate that amount with the registered owner, whilst any unsolved disputes have to be resolved in a Court of Law. As property owners, our rights are still protected by the Constitution. Interesting to note that it is not only in South Africa, but also in other countries where land expropriation happens when and where merited and in public interest.

This issue is also under the magnifying glass of President Trump, who recently threatened on his social platform, Truth Social”, to stop future financing in South Africa until a thorough investigation of this law has been concluded. President Ramaphosa undertook to enter into discussions and to give his input regarding the foreseen land reform policies. We all know that it is so important that economic growth, development, and especially local- as well as international investor confidence, is maintained in order for our economy to grow and for the creation of sustainable jobs that will increase affordability amongst the general population to invest in our Property Market.

Inevitably in the wake of threats made by Pres Trump with his “America first” approach, our Property Market could directly and indirectly be influenced by his changing economic policies and trade wars in Europe, China and further abroad, which in turn could lead to increased worldwide inflation. Our Rand exchange rate is jittery, there is general market volatility and increasing economic challenges are lying ahead of us. Especially looking at the 25-year-long ALGOA US trade agreement whereby certain African countries benefit by getting duty-free access to the US market, that could be changed for us in the foreseeable future. Presently, this agreement impacts around 25% of our exports (e.g. agriculture and motor related industries) to the USA, and an end to this agreement could result in a 20 billion dollar loss for our country. Should this agreement be terminated by Pres Trump and trade relationships weakened, it could escalate further in that the World Bank could also downgrade our financial status. Furthermore a weakening rand will lead to increased import costs that will have a negative impact on our still high inflation, resulting in the SA Reserve Bank staying put and not announcing further cuts in the interest rate for some time to come. Further interest rate cuts are much needed not only for our economy, but also to keep the renewed momentum in our real estate market on track and hopefully another cut in spite of the spate of recent headwinds, this will still happen at the next SARB meeting announcement in March.

Some of the latest interesting facts and statistics:

• After many years of a totally lethargic residential market, we are picking up momentum as seen by increasing show house visitors and general inquiries. We still have reason to believe that 2025 should be a better and improving year all around as with further anticipated rate cuts, homeownership will become more accessible – there is definite hope and room for improvement where 2024 only showed an average house price increase of 0.8% year-on-year, which is the lowest increase recorded over the past 15 years.
• On the commercial front it is most likely that the star performers this year will again be industrial and logistics properties, with much focus being placed on smart building technology and energy-efficient systems that enhance efficiency and a consistent working environment.
• There is also renewed interest in empty standing or partially occupied office buildings to re-purpose them into mixed-use and residential units. Heiberg Estates just listed two extremely well-located office blocks in the Pretoria CBD directly bordering and overlooking Church Square, with mixed-use zoning for retail, offices, and residential which is ideal to be refurbished for mixed-use and with ample bulk on top of the existing buildings available to add more storeys – a brilliant investment opportunity – so please contact us soonest!
• Interesting to note that increasingly, single women are entering the property market and acknowledge property ownership as a definite choice to secure their future. The average age at which South African women buy their first property is 30 years and six months and statistics show that presently more single women owe property than single men. A recent Lightstone survey found that 38% of property stock in our country is owned by single women and co-ownership accounts to 33%.
• The February BetterBond Property report, shows that the market is showing increased activity with 7.5% more loan applications processed last month than in January last year.
• The latest FNB Property Barometer projects average house price growth for 2025 of around 1.7% and for next year around 3% as market fundamentals improve and we get back to normalization after the turbulence of recent years.
• Improvement in market activity is leading to shortened selling times, with properties being an average of 11 weeks on the market before being sold and the biggest demand being in the R2.6m to R3.6m price segments where selling times decreased by two weeks.
• Financial pressure is still a key driver of property sales and lately rose to 26% – far above the long-term average of 18%.
• Emigration-related sales are now recorded at 5% and below the long-term 9%, reflecting diminishing emigration pressure.
• Positive and further pointing to a gradual property market recovery, is the fact that property upgrading activities rose from 10% to 12%, illustrating improved sentiment and affordability with the latest series of interest rate cuts.
• Heartwarming is the fact that StatsSA reports that there was a positive 33.13% year-on-year growth rate in the number of new building plans passed, much better than the previous month’s decline of -5.27%. But still much lower where residential plans passed have decreased cumulatively by -46.7% from the 3-month period to December 2021 to the 3-month period to December 2024. This is -73.8% lower than the multi-decade high reached for the 3-month period to December 2005 when the property market was in a “bubble”.
• Residential buildings completed remained in a year-on-year decline in December 2024 by a noticeable -40.96% and by -34.63% for the 3 months to December 2024 year-on-year.

As property owners, we can count on it and be assured that our Constitution protects our rights. Our property market is busy stabilizing where sideways growth for an extended period, is at last turning to a positive increase in property sale volumes, but still not being on par with our inflation rate and price increases. Buyer confidence coupled with higher affordability with the latest 3 interest rate cuts, is giving renewed impetus in specially established, easily accessible reliable municipal serviced areas. But with so many international factors presently at play and inevitably impacting our country, our property market is pretty much dependent on overall economic conditions and consumer confidence. Hopefully, and in spite of the latest headwinds, the SA Reserve Bank will follow suit with another interest rate cut announced in March to counter our economic stagnation where effectively we have the highest interest rate and the highest unemployment in the world, as well as to mitigate some of the potential risks that could face our fragile economy following Pres Trumps recent economic threats against our country.

However, we positively focus on the fact that lately local market fundamentals are improving, and groundwork is being laid for sustained property market recovery and ongoing positive momentum to be maintained in the foreseeable future. We are all hopeful and holding thumbs that VAT will not be increased which will have a major all-around negative impact on inflation and on our Property Market – and on any further prospects of the SA Reserve Bank lowering the repo rate.

Please be assured that the Heiberg Estates Team remains to be on 24/7 standby for any of your property-related needs and inquiries! Call us anytime at 012 362 4628 (24/7) or Bambie at 083 654 3773. Kindly scan the QR-code to visit our website:

With best and kind regards.

Bambie & Heiberg Estates Team