Statistics South Africa (Stats SA) announced on Thursday that the residential property price index (RPPI) rose by 0.4% month-on-month in January 2025.
This growth underscores a broader trend, with annual national residential property price inflation recording a 5.2% increase in January 2025, slightly up from a revised 5.1% in December 2024.
The RPPI aims to provide insights into the fluctuations in residential property prices across households over time, supported by primary data sourced from the Office of the Chief Registrar of Deeds.
This comprehensive measure offers insights at national, provincial, and metropolitan municipality levels and highlights critical regional differences that impact property values.
According to Stats SA, the primary contributors driving the national inflation rate included the Western Cape, which saw a robust inflation of 8.7%, contributing an impressive 3.3 percentage points to the overall index, alongside Gauteng’s more subdued 2.3% inflation, adding a modest 0.9 percentage points.
When delving into metropolitan areas, the RPPI revealed an overall increase of 5.0% between January 2024 and January 2025.
The City of Cape Town led the way with a remarkable 8.5% increase, contributing 3.1 percentage points, while Johannesburg recorded a modest 2.3% surge, adding only 0.5 of a percentage point.
The index further delineates distinct trends within property segments. Notably, properties sold for the first time experienced a growth of 6.0% year-on-year, while resold properties saw a 5.9% increase.
Sectional title properties, in contrast, increased by 3.1%, while freehold properties led with a 7.1% growth, highlighting the variability within the market.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, said while national averages provide a broad perspective, nuanced regional analyses reveal crucial disparities.
“For example, according to the RE/MAX National Housing Report for Q1 2025, the Western Cape is averaging growth at around 7.4%, significantly outperforming the national average,” Goslett said.
“In contrast, Gauteng, South Africa’s economic hub, lags considerably at -2.5%. With these disparities, it can sometimes be an oversimplification to talk about property market performance for South Africa as a whole.”
For homeowners, particularly those who have purchased in slower markets, current growth figures may be underwhelming.
“With house price inflation barely outpacing or matching consumer inflation, real growth in property value remains minimal. In times like these, it’s important to remember that real estate generates the best returns when viewed as a long-term investment,” he said.
Adding to the discussion, Samuel Seeff, chairman of the Seeff Property Group, expressed optimism about the current climate.
Seeff noted that recent interest rate cuts, totalling a full one percent lower than last year, have sparked an increase in buyer activity, leading to improved price growth.
“Increased buyer activity, and depleting stock levels means that buyers are offering slightly higher prices, albeit still incrementally outside of the Western Cape. The Western Cape has expectedly remained well ahead of the rest of the country for reasons such as good governance and lifestyle,” Seeff said.
“Gauteng is, however, the area that we are keeping an eye on as it has performed well below what it should be, again largely for reasons of poor governance. Prices have stalled for some years now due to lower buyer demand and rising stock levels.”
While challenges persist for some segments of the property market, the data suggests that there is a nuanced landscape for buyers and sellers alike. Investors may find opportunities, particularly in rental properties, as the influx of individuals seeking economic opportunities in Gauteng continues to drive housing demand.
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