Political and economic uncertainty may have some up in arms, but interestingly, these shifts have hit the business investment market harder than it has affected the property investment market.
So, is investing in property in South Africa still a good idea? The short answer is yes.
Let’s unpack:
The property market remains one of the most stable areas for investment
While some investors may choose to play the stock market rather than invest in property, the latter option is far more attractive to risk-averse individuals. It is often considered the ideal way to balance a portfolio. Despite what some may say, our property market has continued to maintain a balanced global position with steady returns and is on an upward trajectory.
According to the Residential Property Price Index (RPPI), the country’s annual national property price inflation reached 5% last December – up by 0.1% from November 2024. The main contributors were the Western Cape (8.6%) and Gauteng (2.3%).
Upwardly mobile young professionals seeking accommodation
As more and more young South African’s enter the skilled labour market and seek to move out of the family home, they are met with a demographic-specific property shortage.
Young professionals continue to drive the affordable housing market nationwide, and developers are paying close attention. Today, there are ample mixed-use properties, new developments, micro apartments and co-living spaces on offer to cater to growing demand.
The rental market is performing
South Africa’s rental market is on the up with more young professionals looking to rent rather than buy. PayProp’s latest Rental Index data highlighted higher rental returns, a near-record low in tenant arrears and increased optimism overall – all of which is good news for investors.
Infrastructure in SA is still better than every other developing country on the continent
Despite what the naysayers may say, our roads, transport hubs and other infrastructures are in far better condition than our neighbouring developing countries like Mozambique or Botswana. South Africa has direct access to the world’s major economies, and most of the world’s biggest companies have branches here.
South Africa is one of the top holiday destinations in the world
South Africa is consistently included in the top holiday destinations in the world, and this, combined with a good exchange rate, has led to some tourists wishing to make their connection more permanent by purchasing holiday homes in the country. The influx of tourists has led to an increase in short-term rental opportunities for property investors, often at more attractive rates than those offered by local tenants.
Banks continue to support homebuyers
Finally, the most compelling reason to invest in the South African property market is that mortgage lending experts have observed an ongoing uptick in banks adopting more lenient lending criteria to potential buyers. From an increase in conversion and approval rates to requiring smaller deposits, this trend is really benefiting the entrance of first-time investors into the market.
