Higher-value properties saw increased churn in 2025

South Africa's residential property market was busiest in the mid to premium segments in 2025, which differed from the usual trends observed in a robust market.

Lightstone reviewed about 200 000 transactions last year in a market of roughly four million homes valued at over R500 000. Sales below R500 000 were excluded due to the high prevalence of subsidised transfers and transactions in that segment that do not reflect open-market value.

Typically, in most residential markets, churn - the number of transactions in a period divided by the total housing stock - follows a "hump-shaped" pattern:

At the entry level and lower price bands, you find moderate to high churn in healthy markets driven by first-time buyers (FTBs), investors and younger households moving more frequently.
Churn is often highest in middle class family homes or mid-market, driven by upwardly mobile seller-buyers, growing families and job relocations, and this segment is often a measure of the economic health of the middle class.
Usually, churn is lowest at the high-end, luxury market because of a smaller buyer pool, longer holding periods and more discretionary transactions.

South Africa has experienced a period where there has been reduced activity in the country's lower price bands relative to the mid and higher bands, consistent with a market sensitive to macroeconomic stress.

In fact, churn in the lower price bands is extremely sensitive to affordability conditions and when interest rates rise or credit tightens, activity drops sharply as borrowers are disproportionately affected. Conversely, cash buyers, often in higher-income, higher-price bands, face fewer constraints.

In societies with marked wealth inequality, high-net-worth buyers drive demand at the higher price levels while lagging wage growth in the middle and lower middle households creates a strong high-end, and a weak entry-level. Structural problems which negatively impact supply include limited supply of affordable housing, zoning restrictions, investor disruption of the FTB market and demographic shifts.

The graph below demonstrates South Africa's atypical market in 2025, with the higher proportion of stock transactions in the premium income bands. In Premium bands (Luxury and Super Luxury) seven out of 100 properties transacted, while only four out of 100 properties in Affordable (and 4.5 out of 100 in Mid Value) transacted.

Price bands: proportion of stock transactions > R500 000 in 2025 per area classification

Interprovincial movers predominantly settle in the Western Cape

While Lightstone's analysis found more property churn in South Africa's higher value residential areas than lower value areas in 2025, a significant majority of seller-buyers remained in the same province and, to a lesser extent, the same municipality. This suggested that while semigration was a significant trend in the market, it was not the dominant one.

However, when they moved province, the Western Cape was the preferred destination and, strikingly, it was the only province to record a net gain over the past five years of sellers who bought again.

Excluding FTBs, 83% of homeowners who sold and bought simultaneously stayed within the same province, and 63% remained in the same municipality.

In the City of Cape Town, 80% of sellers purchased again within the municipality, while 20% moved from Cape Town to other areas in the Western Cape. Among those who left the province, 17% relocated to Gauteng. Of those who remained in the Western Cape, the most popular destinations were Langebaan (including surrounding villages and small towns), Hermanus, and George.

Although the data for 2025 was not complete at the time of writing, the graph "Net provincial positions - Gauteng and Western Cape, suggested the Western Cape attracted fewer residents in the above R500 000 house bands in 2025 compared to the previous four years, while Gauteng appeared to have lost the least since 2021.

Rising prices and affordability pressures in the Western Cape - especially Cape Town - together with declining remote work opportunities, increased return-to-office mandates, and relatively attractive property values in Gauteng, could explain the shift.

Each of the other seven provinces also had a net loss in each of the past five years, and this meant it was only the Western Cape which had a net gain from migration in the category above R500 000.

Net provincial positions - Gauteng and Western Cape

Net provincial positions - except Gauteng and Western Cape

Buying up or down

Interestingly, around two thirds of repeat buyers in the Mid-Value and High-Value categories paid more for a property than they sold for, but the proportions dropped in Luxury (50%) and Super Luxury (36%), perhaps because pensioners scaled down.

Only one third of those who sold in Cape Town and bought elsewhere bought a higher-value property, whereas two thirds of those who bought in Cape Town after selling elsewhere purchased a higher-value property.

Proportion of transactions where buyers upgrade value by price bands

Seller-buyers in the Traditional Townships and Affordable segments led the way in terms of upgrading value. The graph above shows that the lower the price band, the greater the proportion of purchases at greater value.

Proportion of transactions where buyers upgrade value by age

Natural persons versus trusts and company buyers

Property churn was not only greater in higher-value residential areas than in lower-value areas, but higher-value areas were also more likely to have properties purchased in the names of companies or trusts.