South Africa’s residential property market is still battling to recover almost two decades after the 2008 global financial crisis. While many advanced economies have bounced back strongly, analysts say South Africa continues to face slow growth, weak demand, and affordability challenges that have held the sector down.
The insight came from Hayley Ivins-Downes, Managing Executive of Real Estate and Director at Prop Data Lightstone. She explained that although there was gradual improvement between 2010 and 2016, the recovery lost steam long before the Covid-19 pandemic. The lockdown years further weakened property sales, and even the brief post-pandemic rally has started fading.
Ivins-Downes said major economies like the United States, United Kingdom and Australia saw stronger rebounds after the 2008 crisis. But South Africa has battled persistent economic pressure, political uncertainty and rising affordability concerns that have slowed activity in the housing market. She noted that Lightstone’s data shows resilience but also deep structural challenges.
Their analysis compares South Africa’s property trends with selected international markets, focusing on transaction volumes, the rising age of buyers, luxury market trends, and regional variations across South African provinces. To ensure accuracy, the company excluded subsidised properties because they do not follow normal market cycles. Instead, Lightstone based its research on transfers involving natural persons who bought full ownership of single residential properties.
Ivins-Downes explained that buyers registered under companies or trusts were not counted in the main analysis. She said the aim was to focus on ordinary homebuyers and how their behaviour has changed since the 2008 financial crisis.
Meanwhile, ahead of this week’s important interest rate announcement by the South African Reserve Bank, industry leaders are calling for an urgent cut to revive the economy and boost the real estate market. Samuel Seeff, Chairman of the Seeff Property Group, said the time has come for the central bank to reduce the rate by at least 50 basis points.
According to Seeff, several positive developments in South Africa’s economy should convince policymakers to act. He highlighted the country’s exit from the FATF Grey List, the recent S&P Global rating upgrade to BB, and improved job growth in the last quarter. Although the national growth forecast of 1.2% remains weak, he believes it is still better than last year and could get stronger with more economic support—including a rate cut.
Seeff also acknowledged the Reserve Bank’s plan to lower its inflation target over the next two years. However, he warned that interest rates are still around 50bps higher than necessary, holding back the property sector and putting pressure on consumers. He argued that inflation has dropped to around 3.2%, one of the lowest levels in years, excluding the unusual Covid period and the strong economic boom of 2004/2005.
With inflation sitting comfortably within the central bank’s proposed new target band of 2–4%, Seeff said there is enough room for a bold rate cut. He noted that the stronger rand, which traded below R18 per dollar for most of the year and briefly touched R17.06, is another reason to push for a reduction.
However, despite these favourable conditions, Seeff said the Reserve Bank has only implemented three rate cuts this year, the last one in July. He said the Bank has missed two opportunities to reduce borrowing costs, even as inflation remained stable. In contrast, the US Federal Reserve has already delivered two cuts totaling 50bps since mid-year.
Market analysts say while activity in the property sector has improved slightly after the earlier rate cuts, demand is still weak because interest rates remain high. The average residential price growth is around 5%, except for the Western Cape where there is stronger appetite from buyers.
Seeff added that an immediate rate cut would boost affordability, lower mortgage costs, and put extra money back into consumer wallets. This, he said, would help revive home loan applications, which have been slow due to economic uncertainty.
According to the November 2025 BetterBond Property Brief, home loan applications rose by 3.2% in October compared to the third-quarter average. But year-on-year growth from October 2024 was only 0.4%, showing sluggish momentum. The brief noted that many potential buyers are watching the market closely and holding back until interest rates drop further.
Seeff believes a 25bps cut is likely, but argues that a 50bps cut would give the economy and property sector the stronger push they need as South Africa heads into the busy retail season.
