The residential property market is a key component to the economic health of a country, painting a picture of the financial and demographic trends driving the economy. We spoke to Yael Geffen, CEO of Lew Geffen Sotheby’s, for her insights.
YG: You head to port in a storm, right? There’s a reason for that – ports are the very embodiment of brick and mortar. There’s enduring appeal in homeownership and that goes double for a country like ours where so many people have never been able to get into the market. That’s, however, been changing in a big way and, as a single mother, I’m immensely proud of the fact that women make up the bulk of first-time home buyers in South Africa.
YG: By decreasing interest rates, you mean a sucker punch, right? There’s no other phrase for giving with one hand and taking with the other, as we’ve seen with interest rates going down a tiny bit, but knowing a shoe is going to drop. And, as a rule, it’s a big shoe, like a tariff increase of nearly 13% from Eskom.
FNB’s most recent Property Barometer indicates that the first quarter of 2025 saw a notable rise in optimism among real estate professionals in general, with activity levels hitting their highest point in three years. Despite this improved sentiment, actual market performance remains subdued. We need interest rates to drop more before they’ll directly influence the market again.
YG: Much of the market is looking at downsizing, which is extremely sensible given the national economic outlook. Own what you can afford, rather than stretching your budget beyond reasonable limits.
YG: Sectional title is the clear sentiment winner right now, from a security and lifestyle point of view.
YG: People want homes that save on consumption of all municipal services. It’s a no-brainer in the current economy.
YG: The market is largely moving towards buying, because consumers want to build their own economic stability. Data from Payprop at the end of last year showed that rental growth has remained in the 4.5% to 5% range, with many tenants going smaller to save for deposits on properties. The larger the deposit buyers have in hand, the more favourably lending institutions will view bond applications at the end of the day.
YG: Yes, the coast is still massively popular, but the latest buzz phrase is ‘reverse migration,’ which is exactly what it says on the tin – people moving back inland. It is true that the Western Cape is still top of the semigration ratings, but prices in the Cape Town metropolitan area have shot up to a level that puts buying out of reach for much of the local market.
YG: No. Indices show we’re currently trailing by about 16%. This road to recovery is a marathon, not a sprint.
YG: The office sector continues to face challenges, with vacancy rates exceeding 20% in major cities. The shift to hybrid work models has reduced corporate demand, leading to an oversupply. To combat declining demand, many older office buildings are being repurposed into residential apartments, co-living spaces or student accommodations.
The industrial sector is currently the best-performing segment of South Africa’s commercial property market. Demand for warehousing, logistics parks and light industrial spaces remains strong, driven by the rapid growth of e-commerce.
South Africa’s retail market reveals neighbourhood and convenience centres performing better than large regional malls. Smaller retail centres – anchored by grocers, pharmacies and essential services – are proving more resilient.
YG: The super luxury property band is important to us, because it’s a market we have always successfully serviced. This segment is far more resilient to economic movement. We’re also seeing a lot of movement in the R4m to R10m price band. It’s where most of the market is playing now.
YG: For buyers, focus on properties in high-demand areas. With interest rates still elevated, securing pre-approval will strengthen your negotiating position. Be prepared to negotiate aggressively, especially on properties that have been listed for extended periods, as some sellers may accept lower offers to secure a sale.
For sellers, realistic pricing is crucial in today’s market. Highlight your property’s unique selling points and work with an experienced agent.
For investors, industrial and logistics properties remain the strongest performers, driven by e-commerce and supply chain demand.
YG: The word ‘iconic’ is somewhat overused nowadays. If you want the purest definition of the word, it’s the name Sotheby’s. It was first listed on the New York Stock Exchange (NYSE) in 1988, becoming the oldest publicly traded company on the NYSE. In South Africa, we hold the highest average national unit sales price (30% over) and have done so for 24 years. The brand is aspirational to all audiences, especially since we have sold the most international celebrities’ homes. Correction – sold homes to them, then resold them when they’ve wanted to upgrade or relocate.
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