After a tough 2024, real estate agents are moving through 2025 with a fresh sense of optimism — and the trends back it up. Last year’s high interest rates, hesitant buyers, and economic uncertainty made it difficult for many property practitioners to hit their sales targets. But this year? The momentum is shifting.
According to Lightstone’s annual sentiment survey, 86% of agents expect to reach their sales volume targets, while 85% are confident about achieving their value goals. Unsurprisingly, many in the industry are already calling the year "Twenty Twenty Thrive". Here's a look at positive factors shaping the market and challenges to keep in mind (and overcome) in the months ahead.
Bright outlook for the property market
"Property practitioners in South Africa have faced many hurdles in recent years, with some even choosing to exit the industry," says Lynetia Botha, Director at Hatchway Properties. "But 2025 has kicked off with heightened positivity, thanks to reduced interest rates and a resulting buzz in the marketplace. This creates a fresh canvas where strong property practitioners feel empowered to achieve their goals."
This optimism is well-founded. The prime lending rate dropped by 25 basis points (bps) in January, and industry experts anticipate a further 50 bps cut before the year’s end. If these predictions hold, homeowners could see a total 0.75% point reduction in bond repayments. For example, the average home price is currently R1,458,924. On a home loan of this size, this would translate to a monthly saving of R742 by the end of 2025.
"Property practitioners are feeling optimistic this year because the market conditions are shaping up in their favour," agrees Aaron Grant Ruiter, Group Operations and Technology Manager at Harcourts Rhino. "A stable interest rate environment, coupled with a recovering residential housing market, has opened more doors for closing deals."
Beyond interest rate relief, South Africa’s economy is showing signs of steady improvement, giving buyers the confidence to act. "With the economy on an upward trajectory and buyer confidence rising, more clients are actively engaging in property transactions," says Ruiter. The country’s GDP expanded by 0.6% in 2024 compared with 2023. The finance, real estate, and business services industry also grew for an eighth consecutive quarter, with financial intermediation, real estate activities, and other business services being the largest positive contributors to growth.
Consumer sentiment in real estate is on the upswing. According to the Absa Homeowner Sentiment Index (HSI), confidence in the future of residential property climbed to 87% in the final quarter of 2024. First-time buyer activity surged toward the end of the year, reflecting positive expectations for interest rates and affordability in 2025.
The ability to buy and invest in property is also improving as personal finances strengthen. BankservAfrica’s latest Take-home Pay Index (BTPI) shows that after-tax income is rising, indicating positive salary shifts are expected to continue this year. A stronger financial foundation means more buyers can enter the market, boosting real estate activity across the board.
With more cash in hand, buyers are choosing areas where they can live their best lives. According to Hayley Ivins-Downes, Managing Executive (Real Estate Cluster) at Lightstone Property, "the Western Cape and pockets elsewhere are showing strong property sales. This is being driven by safety, lifestyle, and work-life balance, … along with better municipal services."
Cape Town, in particular, remains a hotspot for both local and international buyers. According to Knight Frank’s Prime International Residential Index, prime residential prices in the city grew by 5.1% in 2024. Its lifestyle offerings and affordability have made it a top destination for foreign investors looking for second homes and holiday home buyers from Europe.
“On top of that, advancements in real estate technology are transforming the way real estate agents work, helping them make the most of market opportunities. “Those like smarter marketing tools and customer relationship management (CRM) platforms are giving property practitioners the ability to reach buyers faster and deliver exceptional service. It is a great time to be in real estate, and we’re ready to make the most of these opportunities at Harcourts,” says Ruiter.
Potential roadblocks along the way
While the property market is showing plenty of promise, real estate agents must remain mindful of the challenges that could stand in the way of meeting their sales targets. “One of them is that we operate in a modern and noisy marketplace,” says Botha. “The aim is to differentiate yourself in every single phase of seller and buyer experiences.
“As a property practitioner, you have to be realistic and respect your competing property practitioners' efforts and skillsets. This means looking very honestly at your own strengths and weaknesses while acknowledging the strengths of your counterparts too.
“Once you have a realistic view that there are a lot of good property practitioners out there doing great work, it will become your highest priority to set yourself apart in any possible aspect to gain more attention and make your unique offering shown.”
Another possible obstacle to meeting sales targets is building and maintaining client trust, says Ruiter. “This is critical as buyers become more cautious with their buying decisions. At Harcourts, we aim to ensure our management is always available 24/7 to answer any questions and help potential buyers feel more at ease.
“On top of that, staying ahead of rapidly evolving technologies and navigating regulatory changes will demand continuous learning and adaptability,” he adds. “Interns with Harcourts, for instance, are part of one of only three real estate brands in South Africa accredited to offer the new legislative training, which may be conducted in-house. Having this background would definitely provide any aspiring practitioner with a leg-up in a competitive real estate industry.”
Putting together a plan of action
The promise of a strong sales year is undeniable, but it’s strategic execution that will separate the top performers from the rest of the field. Real estate agents who put together a comprehensive plan tailored to the current landscape will unlock significant growth and achieve their sales goals.