5. 2% annual inflation in South Africa's residential property prices reported for February 2025
Image: ANA Archives
The annual national residential property price inflation was 5.2% in February 2025, marginally down from a revised 5.3% in January this year.
The Residential Property Price Index February 2025, released by Statistics South Africa (Stats SA) on Thursday, showed that the residential property price index (RPPI) increased by 0.4% month-on-month in February.
'The main contributors to the 5.2% annual national inflation rate were Western Cape (8.5% and contributing 3.3 percentage points) and Gauteng (2.5% and contributing 0.9 of a percentage point).
"The RPPI for all metropolitan areas increased by 4.9% between February 2024 and February 2025. The main contributors to the 4.9% annual inflation rate for metropolitan areas were City of Cape Town (7.6% and contributing 2.7 percentage points) and City of Johannesburg (2.9% and contributing 0.6 of a percentage point).'
The RPPI for properties sold for the first time increased by 5.5% between February last year and February this year. The index increased by 0.3% month-on-month in February. The RPPI for resold properties increased by 5.6% between the same period. The index increased by 0.4% month-on-month in February.
The RPPI for sectional title properties increased by 3.2% between February 2024 and February 2025. The index increased by 0.4% month-on-month in February. The RPPI for freehold properties increased by 6.3% between February 2024 and February 2025.
The index increased by 0.4% month-on-month in February. The key takeaway from the February 2025 Stats SA report is the slight dip in annual residential property inflation from 5.3% to 5.2%, alongside a modest 0.4% month-on-month increase, says Dr Meshel Muzuva, an academic programme leader for the School of Business Excellence at the Management College of Southern Africa.
'While the change is minimal, these figures suggest that property prices are beginning to stabilise after a period of more rapid growth. This points to a market adjusting to current economic conditions, particularly rising living costs, interest rates, and affordability constraints,' Muzuva said.
Looking ahead, Muzuva said South Africa can expect the property market to grow steadily in the short to medium term. She said key macroeconomic factors at play are the interest rate cuts as the South African Reserve Bank (SARB) has eased the repo rate to 7.25% as of late May, with a prime lending rate of 10.75%, marking the fourth consecutive cut since September 2024.
She added that a further 25 bps cuts, possibly to 10.50% prime, are anticipated through 2025, which makes borrowing slightly cheaper, which could help boost home buying in the coming months.
The academic programme leader said the inflation dynamics were also at play, with CPI around 2.8 to 3.2%, SARB is comfortably within its target range, creating room for more monetary easing.
'Given that real house prices have struggled for much of the past few years, with weak transaction volumes and slower recovery relative to nominal gains, Global Property Guide believes the resumption of interest rate cuts should gradually boost market confidence, especially for first-time buyers.'
Muzuva said it will be important to monitor how consumer confidence, interest rates, and employment levels evolve this year. She said should the SARB move toward interest rate cuts in response to easing inflation, this could stimulate renewed activity in the residential property market.
On the other hand, she said if macroeconomic uncertainty persists, SA might expect continued caution among both buyers and sellers.
'The February RPPI suggests the property market is settling into a more balanced phase, no feverish boom, but a healthier, more measured trajectory. Watch for further repo rate cuts and CPI stability, which together could lay the groundwork for renewed market momentum, especially in key metro areas.
"For buyers, sellers, developers, and lenders, it's a time to be strategically positioned, keeping a close eye on macro signals to make well-timed moves,' Muzuva said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
4 hours ago
- TimesLIVE
Youth unemployment won't be solved by deregulation
South Africa's youth unemployment crisis is deepening — again. Stats SA's latest Quarterly Labour Force Survey (QLFS) shows that youth employment dropped by 153,000 in the first quarter of 2025, and formal sector jobs are in retreat. These findings prompted the Daily Maverick to warn of 'The Great Unworking' — an era where the promise of jobs is collapsing, particularly for the young...
The Citizen
2 days ago
- The Citizen
Reserve Bank and Ibex reach final settlement of R6.3 billion on Steinhoff fraud
Steinhoff imploded in December 2017 when the auditors refused to sign off on the financial statements due to irregularities. The South African Reserve Bank (Sarb) has reached a final settlement with Ibex of R6.3 billion after an extensive and complex investigation into the affairs of Steinhoff International Holdings and people or entities regarding possible contraventions of exchange control regulations. Ibex was formerly known as Steinhoff International Holdings. After its investigation, Sarb took administrative action against certain entities within and associated with the Steinhoff Group, because they did not comply with the exchange control regulations. The discovery of the now well-known accounting irregularities in the Steinhoff Group in December 2017 led to a sharp and immediate decline in the Steinhoff share price on both the Frankfurt and Johannesburg stock exchanges, eroding approximately 90% of the company's market capitalisation. ALSO READ: What we know so far about the secret PwC report on Steinhoff According to the Sarb the Steinhoff Group's external debt exceeded 10 billion euros (approximately R155 billion) at the time. The crisis threatened the Steinhoff Group's continued existence and risked consequences, including forced asset sales or 'fire sales', significant losses to South African and foreign financial institutions and investors and extensive job losses. There was also a risk that it could significantly affect South Africa's reputation as one of the most robust and well-regulated financial markets in the world, Sarb points out. Steps to restructure Steinhoff debt Complex multi-jurisdictional debt restructuring and settlement processes were implemented between 2018 and 2023 to prevent an uncontrolled liquidation and mitigate the financial distress facing the Steinhoff Group. These processes resulted in the Steinhoff Group fully repaying more than R28 billion owed to South African banks in 2018, as well as compensation to other South African investors amounting to approximately R18.5 billion as part of the global settlement, that involved a total settlement value of approximately R29.6 billion at the time and was approved and sanctioned by international and local courts. ALSO READ: Almost R67 million from Steinhoff accused forfeited to the state The Sarb says the Public Investment Corporation (PIC) was one of the main beneficiaries of the global settlement due to its investment in the Steinhoff Group. South African creditors and banks were able to exit and recover all or most of their money, as foreign creditors agreed to a restructuring of their debt and a deferral of their rights. According to the Sarb, these foreign financial creditors granted forbearance of their claims against members of the Steinhoff Group, ultimately to 30 June 2026, to enable the settlement of various other creditors, who were mainly South African, first. Disputes between Ibex and Sarb Various disputes arose between the Ibex Group and the Sarb in early 2023 regarding the Sarb's administrative actions against Ibex Group due to various alleged contraventions of the exchange control regulations revealed by the investigation. The Sarb says these disputes resulted in multiple legal proceedings between the parties, including the intervention of at least one of the Ibex Group's financial creditors. One of these disputes involved the forfeiture of an amount of about R6.3 billion for the benefit of the state, while others concerned the Sarb's blocking and prohibition orders over the Ibex Group's funds and assets that arose as part of the investigation. In line with legal advice and after careful consideration by the Sarb, all the disputes between the Ibex Group and the Sarb were ultimately resolved in a comprehensive settlement. ALSO READ: NPA secures first conviction and sentence in Steinhoff fraud case The Sarb says In concluding the settlement agreement and fully and finally resolving the disputes between them, the Sarb and the Ibex Group considered the public interest, the Sarb's mandate to enforce the exchange control regulations and the importance of enhancing investor confidence in South Africa. They also wanted to promote regulatory certainty by allowing the Ibex Group to settle its contractual obligations to its foreign financial creditors. 'In fulfilling these aims, the Ibex Group forfeited R6.3 billion plus interest of its funds to the state in full and final settlement of the Sarb's enforcement action against the Ibex Group regarding the alleged contraventions,' the Sarb says. Ibex granted permission to wind down and repay creditors In return, the Ibex Group withdrew its legal challenge to the forfeiture. In addition, the Sarb granted the Ibex Group permission to implement and take all steps necessary for the Ibex Group to implement its Dutch court-approved structured winding down process and repay its creditors and operational expenses. By agreement between the Sarb and Ibex Group, the High Court set aside the prohibition orders restricting the Ibex Group's ability to deal with some of its shares in Pepkor Holdings Limited and the Sarb agreed not to take any further administrative or enforcement action against the Ibex Group regarding the alleged contraventions. In addition, the Ibex Group and the Sarb, with the support of the majority of the Ibex Group's current creditors, withdrew all the litigation they instituted, while the Ibex Group and the financial creditors abandoned the judgments obtained in the course of the litigation. 'The Sarb as well as the Ibex Group consider the settlement reasonable, proportionate and justifiable considering the complex and competing interests. 'Considering the long history of the Steinhoff/Ibex matter, the wider ramification of the continued dispute between the Sarb and the Ibex Group for investor appetite for future investments in South Africa and the interests in finality, the Sarb and the Ibex Group consider this final settlement to be in the best interests of South Africa,' the Sarb says.
The Citizen
2 days ago
- The Citizen
Tourism surge: R4.2 billion spent on SA hotels in second quarter of 2025
Figures show more is being spent at South Africa's hotels and guesthouses, but industry experts say more innovation is needed. South Africa's tourism industry is maintaining its post-Covid comeback with record revenue in the accommodation sector. Accommodation income generated in the second quarter of 2025 increased by 10.5% from the same period last year. Statistics South Africa (Stats SA) released the figures this week in its quarterly report on the tourist accommodation sector. Recovery sustained The numbers are compiled from a monthly survey of hotels, guesthouses and other commercial accommodation owners of tax-registered private and public enterprises Stats SA's report shows the healthy recovery of an industry that was decimated by the global health panic of 2020. Seasonally adjusted income from accommodation at current prices first reached pre-covid levels in Spring 2023 and has exceeded that level for every quarter since July 2024. 'Seasonally adjusted income from accommodation increased by 3.8% month-on-month in May 2025, following an increase of 3.1% month-on-month in April 2025,' stated Stats SA. However, seasonally adjusted occupancy rates have yet to breach the 40% mark, having sat at roughly 45% in January 2020. In the last quarter, hotels earned R4.2 billion, while caravan parks and guesthouses and farms earned R186 million and R337 million, respectively. 'Other' forms of accommodation accounted for R2.7 billion, with the R7.5 billion total excluding food and beverage sales. Industry insights The accommodation industry generated R35.3 billion last year, with the industry sitting on R14.3 billion for the first five months of 2025. Southern Africa Tourism Service Association CEO David Frost said that the country's natural attractions provided a solid foundation from which to build, but required the industry to continually adapt. 'We cannot afford to be complacent. To stay globally competitive, we must continue to diversify and meet evolving traveller expectations,' said Frost. 'True growth lies in how we innovate around these assets. We need to move beyond what we've always done and develop experiences that appeal to a broader range of global travellers.' Frost highlighted areas outside the 'Cape Town-Kruger' corridor as needing extra representation, but explained the 2024/25 cruise season generated R1.32 billion. National Chairperson of the Federated Hospitality Association of South Africa, Rosemary Anderson, agreed with Frost's sentiments on evolving the industry. 'That's now changing, thanks to Tourism Minister Patricia de Lille, who has introduced a new model where government and industry work together in dedicated tourism workstreams. 'For the first time, ideas are not only being developed jointly, but action plans are being put in place. This shift has the potential to be a game-changer for tourism in South Africa,' Anderson concluded. NOW READ: Could tourism be the answer to SA youth unemployment?
