2 days ago
South African house prices surge ahead of inflation: what it means for buyers
Property prices in South Africa are rising, with the average residential price surpassing R1.6 million for the first time and annual growth of 6.4% as of June 2025.
Releasing the FNB Residential Property Barometer - August 2025, Siphamandla Mkhwanazi, a senior economist at FNB, said that for the first time in the post-pandemic era, equity values generated by sectional title properties marginally outpaced those of freestanding homes (3.8% vs 3.7%).
This was as the FNB House Price Index averaged 3.7% year-on-year in July, marking a notable shift.
He said the shift in buyer sentiment towards sectional title properties likely reflects evolving lifestyle preferences and affordability constraints.
'Following a relatively aggressive hiking cycle (2021 to 2023) and persistent real wage underperformance since 2021, buyers appear to be gravitating toward more compact, cost-effective housing options,' Mkhwanazi said.
An overwhelming majority of South African households are currently priced out of the local property market, and this trend is worsening, according to Renier Kriek, the managing director of innovative home finance provider, Sentinel Homes, recently.
He said the root causes are mainly systemic and need to be addressed by the government.
In its June 2025 Property Newsletter, automotive and property data provider Lightstone reported that only one formal house exists per 3.3 families, who earn less than R26 000 per month. This accounts for more than 80% of South African households.
Meanwhile, the Seeff Property Group said South Africans prefer the northern provinces of Mpumalanga, Limpopo and North West. It said these areas have seen good house price and rental rate appreciation.
'While these provinces offer very affordable house prices and rents, the areas also offer sought-after security estates, including those with bush and golf experiences, and luxury homes achieving prices of up to R5 million to R8 million and sometimes more.'
These areas also have bustling economies in mining, agriculture, and tourism.
