Eva August, CEO of Century 21 South Africa has spent her career watching property cycles unfold across every corner of this country. She has seen booms that defied gravity and busts that humbled even the most seasoned investors. But what she is witnessing now is something different entirely: a rare convergence of falling interest rates, competitive bank lending and realistic property pricing that has created the most compelling buying environment in over a decade. For those prepared to act, the mathematics are undeniable, and the opportunity is closing faster than most people realise.
After decades in real estate, market conditions as favourable for property buyers as those we see today are exceptional. The prime lending rate has dropped to 10.50% following five consecutive cuts by the South African Reserve Bank since September 2024, creating a window of opportunity that shrewd buyers would be wise to embrace.
The Numbers Tell a Compelling Story
For a typical R550,000 home loan, each 0.25% rate cut saves approximately R83 per month, with the cumulative four cuts since September 2024 potentially saving around R332 monthly. This translates to nearly R4,000 per year in reduced repayments – money that stays in buyers’ pockets rather than flowing to banks.
But the story extends beyond immediate savings. Financial experts predict the prime lending rate could drop to 10.50% or lower by the end of 2025, as inflation remains well-controlled at 3.0% and economic growth needs support. This creates a rare scenario where buyers can secure financing at multi-year lows whilst property prices remain relatively flat.
The Supply-Demand Equation in Most Regions
Whilst new developments proliferate across the country, particularly in sectional title schemes, the free-standing house market tells a different story. This oversupply in certain segments – especially in Gauteng and other metros – has created a buyer’s paradise where choice is abundant and negotiating power sits firmly with purchasers.
Lightstone’s data shows that 27% of people who sell and buy, do so in a new province, a significant increase from the 16% it was in 2019. This semigration trend continues to reshape our property landscape, with buyers increasingly looking beyond traditional metros for lifestyle and value opportunities.
The Western Cape remains the top semigration destination, with 14 of the 15 towns experiencing an influx of new owners from other areas located in this province. However, smart buyers are discovering exceptional value in Gauteng and KwaZulu-Natal, where property pricing has stabilised after years of adjustment and genuine buyer’s market conditions now exist.
Banks Are Fighting for Your Business
The competitive lending environment has fundamentally shifted in buyers’ favour. In Q2 2025, 59% of first-time homebuyers secured a home without a deposit, whilst 10.5% purchased a home without a deposit or access to funds for transfer and bond costs. This level of bank support for buyers was unthinkable just two years ago.
Banks are not merely competing on interest rates. They are offering comprehensive packages that include covering legal costs, bond registration fees and even providing cashback incentives. Nedbank, for example, offers clients up to R15,000 in cashback on the loan value and a 0.25% reduction in the home loan interest rate when chosen as the primary bank.
The key lies in understanding how to leverage this competition. Rather than accepting the first offer from your relationship bank, savvy buyers should engage bond originators who can simultaneously approach multiple lenders. This strategy often yields significantly better terms than traditional single-bank applications.
Strategic Advice for Today’s Buyers
First, understand that property pricing in most regions has stabilised and is showing early signs of decline in certain segments. This shift means buyers outside premium markets can afford to be selective and patient during negotiations. Sellers who have been holding unrealistic price expectations are beginning to adjust to market realities.
Second, consider the timing carefully. With the South African Reserve Bank having delivered five consecutive rate cuts since September 2024, experts predict the prime rate could drop to 10.50% or lower by year-end. However, waiting indefinitely for the “perfect” rate carries the risk of missing current opportunities, particularly in areas like Cape Town where prices continue rising despite improved financing conditions.
Third, approach banks strategically. Don’t rely solely on your existing banking relationship. The competitive landscape means different institutions may offer vastly different packages based on their current lending targets and risk assessments. Use this to your advantage by obtaining multiple quotations from lending institutions.
The Cape Town Conundrum
Cape Town is not following the same trajectory as the rest of the country. Before proceeding further, buyers must understand that Cape Town’s property market operates in a different universe entirely. Whilst most of South Africa experiences flattening or declining prices, Cape Town property values surged 8.5% year-on-year to mid-2025, compared to the national average of 5.2% and Johannesburg’s modest 2.3%.
The Western Cape accounted for 38% of national real estate transaction value in 2024, despite having just 11% of the population. Average property prices in Cape Town now stand at approximately R3.5 million, with prime suburbs commanding R31,000 per square metre – more than double Johannesburg’s R14,000.
This isn’t a buyer’s market. Not for the vast majority of locals anyway. Cape Town remains severely undersupplied, particularly in prime areas where foreign investment represents 67% of sales. International buyers spent over R1 billion in Cape Town in the first five months of 2025 alone, with record-breaking sales including properties selling for R66 million in Clifton and R52 million in Bishopscourt.
The advice in this article applies primarily to Gauteng, KwaZulu-Natal and other regions where genuine buyer’s market conditions exist. Cape Town buyers face different dynamics: limited stock, strong competition and continued price appreciation that shows no signs of slowing.
The Broader Economic Context
With inflation well-contained at 3.0% and the SARB’s shift to targeting 3% inflation rather than the previous 4.5% midpoint, the central bank has moved from a restrictive to an accommodative monetary policy stance. This fundamental policy shift suggests the current buyer-friendly environment in most regions may persist longer than many anticipate.
However, property markets are cyclical. The confluence of low interest rates, stable pricing and competitive lending will not last indefinitely. Economic recoveries typically herald rising property prices as confidence returns and demand increases.
Looking Forward
The current environment presents a unique set of circumstances that benefit prepared buyers in most South African regions. Interest rates are at multi-year lows, banks are competing aggressively for business, and property pricing outside premium markets remains realistic after years of adjustment.
For first-time buyers in Gauteng, KwaZulu-Natal and smaller metros, the barriers to entry have rarely been lower. Government initiatives continue supporting homeownership whilst banks offer unprecedented financing flexibility. For upgraders in these regions, the opportunity to move into better properties without proportional increases in monthly repayments is exceptional.
For investors, the mathematics vary by location. Whilst Cape Town’s luxury market continues to appreciate robustly, other regions offer different advantages: stable rental yields combined with significantly lower entry costs. Gross rental yields for apartments in Johannesburg average 11.38% in Q2 2025, compared to Cape Town’s 9.42% – a reflection of different market dynamics and investment opportunities.
The message is clear: current market conditions in most of South Africa represent a window of opportunity that may not remain open indefinitely. Buyers who act decisively, armed with proper financial preparation and strategic thinking, stand to benefit significantly from what may be remembered as one of the best buying environments in recent memory.
The question for buyers outside premium coastal markets is not whether you can afford to buy in this market – it is whether you can afford not to.
AUTHOR BIO:
Eva August (CEO, Century21 South Africa)
Eva August is a seasoned real estate leader with over 15 years of experience in the South African property market. Appointed CEO of Century21 South Africa in 2024, she brings a strong track record in residential sales business management, franchise development and operational leadership. Prior to her appointment, Eva served as National Operations Manager for five years, where she was instrumental in driving the brand’s national growth and performance. With a background spanning commercial, industrial and corporate real estate, Eva is known for her strategic approach, franchise expertise and commitment to empowering agents and teams across the country.
For more information, visit https://www.century21.co.za/. Century 21 South Africa Head Office is located at Unit 1 Palms View 54 Van Buuren Road, Bedfordview. Tel: 011 455 0066.