Economy and Property Market Poised for Growth

It may all finally be coming together for the economy and property market with a number of positive factors and recent economic developments. This is indeed good news for the property market, sellers, buyers, and investors, and hopefully paves the way for a more positive and productive year ahead.

Recent positive indicators include the FTAF Grey List exit, as well as the recent S&P credit upgrade to a BB rating with a positive outlook (the first in 20yrs). This action was influenced by an improving fiscal trajectory, strong tax collection, and better performance from state-owned enterprises such Eskom, which directly supports the positive economic growth projections.

This was further echoed by Finance Minister, Enoch Godongwana when he presented the mid-term budget in November. It has been hailed as positive, focused on debt consolidation and reduction, economic growth, and infrastructure development, laying a foundation for an improved economic outlook next year. The positive sentiment around improved growth was also signalled by the Reserve Bank Governor when he announced the latest 25bps interest rate cut.

Inflation has remained fairly contained at a historic low of around 3.3% on average for the year despite the recent marginal uptick. The rate is also still comfortably within the Bank's proposed new lower inflation target range of 2-4%. Additionally, the currency remains stable below R18.00 to the USD, recently strengthening closer to the ZAR17.20 mark. These are encouraging for a potential further rate cut in the new year.

The interest rate cuts, amounting to six cuts since mid-2024, have been hugely positive for the economy and property market. The latest cut in November brings the prime lending rate down to 10.25%, reducing the cost of borrowing, in particular that of home loans, providing significant savings for consumers and home owners with more disposable income to spend in the economy. The cuts have directly enhanced property affordability and is expected to further stimulate buyer demand.

For the Cape Town property market, it has been another strong year as it has  again significantly outperformed the national averages, and looks to end the year with the highest average price growth. The Western Cape remains the only region to record real (inflation-adjusted) property price growth over the last few years, reinforcing its status as a robust and resilient market.

The market has been rewarding for buyers and sellers with positive momentum for sellers and buyers, fuelled by sustained buyer demand, semigration and investment trends, and the strong local governance. The market in particular continues to stand out in its offering of the ideal combination of a great lifestyle and a choice of property options to suit different needs and budgets, from residential to holiday and retirement.

The market remains favourable for buyers and sellers, and now is the time to buy or sell. If you are considering your next move, or would like an assessment of what your property might sell for, please feel free to contact us at any time via WhatsApp, email, or phone.

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