These are the top hotspots for property investors in 2025
Cape Town - Investor sentiment in Cape Town is cautiously optimistic and South Africans are once again looking to invest in real estate in 2025.
According to experts, with national rental vacancies currently lower than they have been in eight years and the repo rate slowing adjusting, now is an excellent time to enter the rental market.
Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, said the property market in Cape Town is characterised by high demand and resilient property values, with some suburbs once again seeing double-digit price growth.
The Atlantic Seaboard, City Bowl and southern suburbs continue to attract both local and foreign investors, while areas like False Bay and the Western Seaboard offer comparative value with lower entry price points.
"For investors looking to buy on the Atlantic Seaboard or in the city, luxury apartments and short-term rental properties are ideal as Cape Town’s strong tourism industry along with a high number of corporate travellers ensure that short-term rentals yield high returns," Geffen said.
"Townhouses and flats in areas like Green Point, Sea Point, and Gardens are popular among young professionals and offer stable long-term rental returns.
“In the southern suburbs, freehold family homes that are secure and well-priced are in very high demand as are homes in secure developments."
The 2023/24 property market has been good to investors, as coastal towns in the Western Cape, along with smaller towns along the Eastern Cape and KwaZulu-Natal coastline, bucked the national sales volumes and price trend, according to Lightstone, a provider of data, analytics and systems on property.
Hayley Ivins-Downes, managing executive of real estate at Lightstone, said nationally, sales volumes declined by 5% in 2023 compared to 2019, while homeowners paid on average 25% more for their properties in 2023.
In the Western Cape, sales volumes increased by 6% from 2019 to 2023, while the average price difference for transactions was 39% more for the same period.
However, if Cape Town was excluded then the volume increased by 10% while the average price of transactions was 43% more than in 2019.
The Western Cape is still the most expensive province to rent in, followed by the Northern Cape and then the KwaZulu-Natal.
In Q4 2023, the average rent in the Western Cape passed R10 000 for the first time and now it could be on track to reach R11 000 by the end of 2024.
Rental growth was recorded at 9.3% for Q3 2024.
Growth in the Western Cape has now been the highest in the country for two straight quarters, with Cape Town particularly expensive to live in.
In March 2024, the most expensive property in Cape Town’s southern suburb of Constantia went on the market for a R107 million.
In Clifton, a parking bay can be listed for between R990 000 and R1.5m, while a one-bedroom tree house in Gordon’s Bay can be rented at R5 000 per month.
Jacqui Savage, national rentals manager for the Rawson Property Group, said: “The demand for rental properties has been phenomenal, particularly in Cape Town, Johannesburg, and Pretoria. Young professionals, students, and international tenants have been the main drivers, especially in areas like the Atlantic Seaboard, Rondebosch, and Claremont.”