House price growth is projected to climb to 1.7% in 2025 with a gradual acceleration to exceed 3% by 2026, according to FNB’s Q4 2024 Residential Property Barometer.
While annual average price growth recorded 0.8% during 2024, lower than the 1.5% recorded in 2023, demand is expanding with the supply of properties on the market continuing to shrink, says Siphamandla Mkhwanazi, Property Economist at FNB. “However, real house prices remain undervalued relative to market strength indices, reflecting buyer caution despite improving conditions,” he says.
According to FNB’s Q4 2024 Estate Agents Survey, sentiment among property practitioners presented a mixed picture. Confidence was strongest in the R2.6 million to R3.6 million price range (71% of estate agents) which is consistent with rising activity levels in this price bracket. By contrast, confidence in the <R750 000 and <R750 000 – R1.6 million segments weakened.
Gauteng (74% of property practitioners) and KwaZulu-Natal (47%) both led with improvements in estate agents’ satisfaction with overall market conditions while the Western Cape saw a decline to 55% from 61% in 2023. The Eastern Cape dropped sharply in sentiment to 36% from 62%, marking the lowest confidence level across the regions.
The uptick in market activity has shortened selling times with properties now spending an average of 11 weeks on the market. The largest improvement was seen in the R2.6 million to R3.6 million price segment where selling times decreased by two weeks from 11 weeks to 9 weeks. Regional improvements were driven by the Western Cape and KwaZulu-Natal markets.
The estate agents pointed to persistent financial pressure as a key driver of property sales during Q4 2024, with financial pressure-induced sales rising to 26% from 23% in Q3 2024. Still, property owners continue to downsize rather than rent.
Life-stage downscaling accounted for 21% of sales with emigration-related sales easing to 5%. Upgrading activity rose to 12% of sales from 10%.