HEIBERG ESTATES NEWSLETTER: JUNE 2025

Dear Property Partners

Amidst our sluggish and slow growing economy, we remain to be cautious optimistic for the second half this year, with positive influences prevailing throughout our property market. There are definite gradual signs of our property market gaining momentum where a recent SA Investor- and Bank Report, pointed property out as the second most popular asset class in our country, whilst sales are slowly picking up as illustrated by increasing bond applications. According to the June BetterBond Property Brief there was a 4% year-on-year increase in the number of home loan applications and a 8.4% share in home loans for houses priced above R3 million – however as a result of the relentless rise in the prime rate to its highest in 15 years, the index for the 12 months ending in May 2025 showed a 34% decrease in comparison to 4 years ago!

The continued positive mortgage lending environment where banks are also easing deposit requirements, the fact that the zero-rated transfer duty threshold has been raised to R1.2m and the fact that VAT was not increased, are further positive factors worth mentioning and adding to better buying conditions and activities. Hopefully with our constantly lower inflation rate than the Reserve Bank’s 3%-6% target band, the Bank will soon anchor inflation expectations around the lower 3% inflation target which might institute further interest rate cuts. The Middle East turmoil will inevitably play a major role in immediate and future interest rate decision-making.

As mentioned before, the latest interest rate cut announced by the SA Reserve Bank which is the fourth cut since September 2024, has brought the interest rate to 10.75% and is supportive for our economic sector, especially looking at our real estate market where it is a boost for investors affordability and confidence. For property owners, the cumulative reduction of 1% since the cutting cycle began is easing pressure on disposable income, whilst a property investment will always be regarded as evidence of success and to build long term wealth.

Some of the latest interesting property facts and statistics:

• Data released by ooba shows that the national demand for buy-to-let properties, represented 13.9% of loan applications versus the 11.8% recorded a year earlier. The Western Cape once again outshines the other provinces in this niche market. Buy-to-let properties were recorded at 34% of all bond applications in the Western Cape which is 5% higher than the previous year.
• Interesting to note that nearly 10% of first-time Buyers, enter the market to buy investment properties to let versus the only 4% that did so in 2014.
• Our SA Property market has remained resilient irrespective of what the challenges over the years were – just looking at the past 20 years average, prices increased by ±8% per year, over the past 10-year the average price increase was ±5% (influenced by load shedding and policy shifts), the past 5-year average increase was ±3% (influenced by high interest rates and tighter lending conditions) and the past 3-year average ±3%. This demonstrating price stability under broad-front economic- and political challenges. The past few months of this year already showed a ±3.7% price increase despite persistent international political and economic challenges.
• Lighstone provincial price growth statistics report a steady recovery and points out the following regarding the April year-on-year provincial price growth: Limpopo 6.82% with the Free State the lowest at 0.49%, Western Cape 5.67%, Northern Cape 4.75% and Gauteng 2.17%. All of this showing a more balanced performance when looking at the historical gap between coastal and non-coastal property price growth.
• Foreign buyers see the Western Cape as their preferred destination where they accounted for 40% of all property transactions above R10m, 25% of all transactions between R5m and R10m and 15% of transactions between R3m-R5m.
• Our SA residential rental market amid our favourable inflation environment with CPI inflation falling from 3.2% in February to 2.7% in March and driven by strong tenant demand, is blooming. PayProp Rentals reports a best in performance so far in 2025 for many years where the average national rental growth has reached 5.6% in the first quarter, the strongest quarterly increase since the 3^rd quarter of 2017. Growth peaked in February showing a year-on-year increase of 6%, the highest monthly increase recorded since August 2017.
• The present average rent-to-income ratio remains at 28.8% and is below the recommended point of reference of maximum 30%. Limpopo also outshined the other provinces as one of the fastest growing markets with a 10.9% price increase in the monthly rental amount versus e.g. the 7.6% recorded in the Free State. Gauteng’s rental growth reduced to a 2.9% in average rent, whilst the Western Cape continued to be still on track with the highest average rent in SA at R11 285pm and averaging a year-on-year growth of 9.6%. There is a growing and visible stronger rental demand with better returns for landlords all over the country.
• Semigration is escalating where buyers move between provinces for better lifestyle and employment opportunities. Also interesting to note the increasing number of expatriates returning home. FNB recently reported that last year 10% of all sales were due to semigration, whilst Lighstone data shows that 27% of people who sell or buy, do so in a new province – this up from the 16% recorded in 2019. Gauteng recorded 23% of all transactions, were due to people moving to the province for better employment opportunities.
• Lightstone also reports that fewer people are buying homes together than they did 10 years ago. The percentage of single owner buyers increased from 51% in 2013 to around 55%, whilst joint ownership dropped from 36% to 30%.

At this midpoint of 2025 and observing growing global turbulence and local challenges, we are observing property investors renewed looking at property investment opportunities as a safe asset class. Diversifying property portfolios is growing in popularity, especially looking at commercial properties in this present Buyers market, where excellent opportunities present itself and where a capex rate of around 11% is recorded compared to 5-8% for residential properties. Never to underestimate is one of the most important advantages of home ownership, is that it is building equity whilst paying off your bond. This will always serve as a valuable asset and a cornerstone in your investment portfolio being a safe source of building medium- to long-term wealth whilst providing stability for you and your loved ones. With property demand presently higher than supply and the latest interest rate cut bolstering confidence in our housing market, property prices are also on the gradual increase and our positive mortgage lending environment, further stimulating sales.

Our resilient property market has withstood headwinds and the test of time for many decades now. It remains one of the main reasons that South Africans are returning to this safe investment heaven of brick and mortar and that is why YOUR HEIBERG ESTATES TEAM remains to be on 24/7 standby for any property-related needs – whether selling, buying or renting! Please contact us! Scan the QR-code below to visit our website:

P.S. We are virtually sold out and urgently need properties to sell or to rent (the diplomatic season almost on our doorstep) – please contact us for a free property assessment. Always a pleasure to share more than 50 years of collective experience with you!

With warm and sincere regards

Bambie & Heiberg Estates Team.