By Siphamandla Mkhwanazi
Overview
The second quarter of 2025 saw a slight cooling in the South African residential property market's activity and sentiment compared to the previous quarter. While the affordable housing segment continues to show resilience, overall momentum has softened, influenced by seasonal factors and heightened uncertainty. Regional dynamics presented a mixed picture, with some areas seeing improved activity despite declining sentiment, and vice versa.
Market activity
Estate agent-reported market activity experienced a modest decline in 2Q25, with the Activity Index falling slightly to
5.9 (from 6.3 in 1Q25). This indicates a modest cooling in market momentum. The affordable housing market (
Looking ahead to 3Q25, overall agent expectations for increased market activity have notably softened, with only 34% anticipating growth, a significant drop from 46% in 1Q25. However, the affordable market remains relatively optimistic, with 66% of agents expecting higher activity, likely buoyed by the recent interest rate cut. In contrast, expectations for the traditional market dropped sharply to 23%. Seasonality (winter slowdown) and broader economic stress were cited as key dampening factors for the upcoming quarter.
Sentiment and regional dynamics
Agent satisfaction with current market conditions softened to 62% in 2Q25, down from 68% in the previous quarter. This overall decline in sentiment was uniform across all price segments, except in the affordable market where it climbed from 58% to 72%, the highest across price segments. Confidence remained strong in the R2.6-R3.6 million price range, recording 70% satisfaction, albeit a decrease from 84% in 1Q25, and weakest in the R750k-R1.6 million segment, where it notably declined from 59% to 45%.
Regional performance revealed distinct patterns in both market activity and agent sentiment. In Gauteng, the activity index registered 5.7, a slight decline from 6.1 in 1Q25. Concurrently, agent satisfaction in Gauteng experienced a notable drop of nine percentage points, falling to 66% from 75% in 1Q25, partly reflecting disruptions related to the temporary Deeds Office closure in Johannesburg. Despite this softening, Gauteng still maintains the highest overall agent satisfaction among the regions.
The Western Cape saw its activity index at 5.9, a notable decline from 7.2 in the previous quarter. However, sentiment in the Western Cape remained remarkably stable at 67%, only a marginal decrease from 68% in 1Q25, solidifying its position as a consistently strong performer with resilient agent confidence.
Conversely, KwaZulu-Natal (KZN) presented a contrasting picture, where market activity actually improved to 6.3 in 2Q25 from 5.9 in 1Q25. Despite this uptick in activity, agent sentiment in KZN experienced a marginal decline to 47% from 49% in 1Q25, likely due to persistent infrastructure challenges weighing on overall confidence.
The Eastern Cape also witnessed an improvement in activity, with its index rising to 6.1 from 5.9 in 1Q25. Yet, this positive activity trend was accompanied by a significant drop in agent sentiment, falling by ten percentage points to 56% from 66% in 1Q25. This suggests a disconnect where transaction levels increased but agents' underlying confidence in market conditions or future prospects in the region waned.
Selling times
The average time properties spent on the market remained unchanged in 2Q25 at 12 weeks and one day, consistent
with 1Q25. The shortest selling time was observed in the R1.6-R2.6 million segment, at ten weeks, an improvement
from ten weeks and five days in 1Q25. Conversely, properties in the
Price Trends: Price drops remain prevalent in the market, with 75% of properties selling below their asking price, a slight improvement from 78% in 1Q25. Sellers in the affordable market, in particular, had to drop prices by an average of 11%, although significantly fewer properties (42%) sell below asking prices, compared to 86% in the traditional market. Overall, price reductions averaged 9%, consistent with the long-term average. Only 1% of sales exceeded the asking price, mostly in affordable markets where supply is constrained, underscoring continued buyer caution and price sensitivity.
Persistent financial pressures continue to drive sales
The survey highlights that financial pressures continue to be a significant motivation for selling property (Table 2):
Technical Analysis:
Buyer dynamics
Conclusion
The results of the 2Q25 Estate Agents Survey reflect a market navigating a complex landscape shaped by seasonal shifts and broader economic headwinds. Heightened global and domestic uncertainty—particularly surrounding the stability of the Government of National Unity (GNU)—likely contributed to the softening in sentiment and the cautious outlook observed among agents. Encouragingly, some of this uncertainty has subsequently eased, offering a more stable backdrop for market participants. Recent interest rate cuts have provided a tangible boost to activity in the affordable housing segment, where both buyer demand and agent optimism remain relatively strong. Looking ahead, continued rate relief is expected to support buying activity, especially in the low- to mid-market segments. However, unlocking sustained momentum in the higher-priced tiers will require accelerated economic reforms and greater political clarity to restore confidence and drive broader market recovery.
