The SA residential property market saw a modest cooling in the second quarter of 2025, with estate agents reporting lower activity levels and sentiment amid ongoing economic uncertainty.
According to the latest FNB Property Barometer, the overall Activity Index dipped to 5.9 from 6.3 in the first quarter, signalling a softening in market momentum.
While the broader market showed signs of deceleration, the affordable housing segment (properties under R750,000) continued to outperform. This segment recorded a relatively strong activity level of 6.2, and agent sentiment surged to 72% — up sharply from 58% in the first quarter — buoyed by the recent interest rate cut and rising demand from first-time buyers
“The affordable segment remains the most dynamic part of the market, supported by rate-sensitive buyers and limited supply,” said FNB economist Siphamandla Mkhwanazi.
First-time buyers now make up 26% of market activity, up from 24% in the first quarter, with a strong presence in the affordable segment where they account for 46% of buyers. Buy-to-let investors also grew their share to 12%, largely targeting lower-priced properties.
Echoing this shift in buyer behaviour, Landsdowne CEO Jonathan Kohler recently noted that while average selling times had increased, especially for luxury homes, affordable and mid-range properties were moving faster, particularly in suburbs.
In contrast, the traditional mid-market (R750,000-R1.6m) saw both activity and sentiment fall sharply, with satisfaction levels plunging to 45% from 59% previously. Sellers in this segment also faced growing pressure, with selling times extending slightly and larger price drops required to close deals.
Regionally, the picture was mixed. KwaZulu-Natal saw the most notable improvement in market activity, rising from 5.9 to 6.3, while the Eastern Cape also registered a modest increase. However, sentiment in both provinces declined — falling to 47% and 56% respectively — indicating growing caution among estate agents despite improving transaction volumes.
The Western Cape reported a sharp decline in activity (down from 7.2 to 5.9), yet sentiment remained relatively stable at 67%. Gauteng, the country’s largest market, experienced a decline in both activity and satisfaction, with sentiment dropping nine percentage points to 66%, partly due to the temporary closure of the Johannesburg Deeds Office.
Distressed sales held at 21%, with downscaling still driving a quarter of transactions. Emigration remained low at 5%. Average selling time stayed at 12 weeks, with mid-range homes selling fastest at 10 weeks, while sub-R750,000 properties slowed to 14 weeks.
“Agent confidence dipped to 62%, with only 34% expecting a pickup next quarter. Optimism remains strongest in the affordable market, where 66% of agents foresee increased activity, versus just 23% in the traditional segment,” FNB said in the property barometer report.
Mkhwanazi said the market would face ongoing economic pressure, but the affordable segment remained resilient. Meanwhile lower rates and easing political uncertainty offered support, though higher-end recovery hinged on policy clarity and reform.
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