Foreign favour and local fortunes
This month, we explore what's shaping South Africa's property market in 2025. Foreign buyers are back in a big way - particularly in the Western Cape - paying significantly more than locals and snapping up luxury homes. We also spotlight Lightstone's award-winning tech, modest house price inflation forecasts, and emerging hotspots in unexpected provinces. Despite economic headwinds, the market reveals promising trends in Sectional Title living, retirement hubs, and coastal towns. Whether local or global, smart property decisions start with data-driven insight.
More of the same for house prices
Lightstone's 2025 house price forecast shows modest growth, with HPI expected to reach 2.5% under the most likely mid-road scenario. A more optimistic high road could see growth of up to 3.5%, while a low road, driven by weak GDP and inflationary pressure, could push HPI down to 1.5%. Sectional Title properties and Mid- to High-value homes may benefit most if favourable conditions prevail, but overall, a residential market rebound is not anticipated.
Read MoreForeign house buyers on the up
Foreign interest in South Africa's residential property is on the rise, with the Western Cape emerging as the top choice for non-resident buyers. Lightstone's latest analysis reveals that non-resident buyers now outspend locals and resident foreigners, averaging over R2.7 million per purchase in 2024. Their market share has grown steadily since 2019, particularly in luxury segments, with over 40% of R10 million-plus property transactions attributed to this and hotspots like Scarborough and Bakoven topping the list.
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Opportunities hiding in plain sight
Despite sluggish sales growth, South Africa's residential property market still holds untapped potential. This was the key takeaway from a recent webinar hosted by Retail Property Investor Magazine. Lightstone and industry experts highlighted steady value growth over the past decade, with 2024 showing slight gains in sales volume and emerging opportunities driven by urbanisation, semigration, and foreign investment. While the Western Cape remains strong, rising house price inflation in Limpopo and Mpumalanga point to overlooked opportunities.
Read MoreLightstone honoured at inaugural Africa Valuations Awards
Lightstone was honoured at the inaugural Africa Valuations Excellence Awards, winning the "Smart Technology in Property Valuation" category for its innovative Automated Valuation Model (AVM). Lightstone's Residential Property Index was also nominated in the "Public Media Promoting Property Valuation" category. The recognition highlights Lightstone's commitment to innovation, data-driven solutions, and improving accessibility and accuracy in property valuation across the African real estate market.
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Lightstone's latest House Price Index
Lightstone's latest Property Index shows national house price inflation holding steady at 2.8%, with slow but consistent monthly growth. The Western Cape continues to lead among provinces, though its inflation has slightly declined, while Gauteng and KZN edge upward off lower bases. Across value bands, Mid-, High- and Luxury segments show modest month-on-month gains, now at 2.7% and 3%, while the Low-Value segment has eased to 6.4%.
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