New property investment trends are emerging in South Africa as investors tap into the growing demand for coastal homes and look beyond traditional rental models to build wealth. Picture: Henk Kruger/African News Agency (ANA)
New residential developments are anticipated to pick up, particularly in the Western Cape, which has experienced the fastest housing price growth, reflecting an under-supplied residential market.
This is according to FNB Commercial Property Finance senior economist John Loos.
He added that retail developments are likely to follow in areas where residential growth occurred.
“The migration of skilled and higher-income individuals to regions that offer better infrastructure and lifestyle benefits, particularly along the South African coastline, presents significant development opportunities.
“The Western Cape, especially the Southern Cape and West Coast, as well as KwaZulu-Natal’s North Coast, remain popular.
“There is growing potential for areas like the KZN South coast and Eastern Cape coast as affordability and crowding in the Western Cape becomes a concern,” Loos said in a recent interview with Independent Media Property.
Meanwhile, Standard Bank, head of Personal and Private Banking Chiko Manokore said in a statement this week that new property investment trends are emerging in South Africa as investors tap into the growing demand for coastal homes and look beyond traditional rental models to build wealth.
Data from Standard Bank reveals that one in eight mortgage applications nationally over the past year were for buy-to-let properties. The Western Cape emerged as a leading hotspot for property investors, with 31% of new home loan applications in the province linked to buy-to-let ventures - more than double the national average of 12%.
“Over the past decade, the Western Cape has consistently positioned itself as an investment destination. Areas like Cape Town have benefited from consistent demand driven by tourism and a growing expat community,” Manokore said.
According to Standard Bank, Gauteng, South Africa's economic hub, continues to show strong buy-to-let activity too, nearly double the national average.
Tshwane is leading in this regard and the province’s rental market is driven largely by investors seeking additional income streams.
The Eastern Cape has also become a key player in the buy-to-let market, attracting more property investment than the national average.
In contrast, KwaZulu-Natal (KZN) has seen lower buy-to-let activity in the past year, with only 6% of home loan applications in the province linked to property investment.
The financier said overall, this year’s data highlights the evolving nature of South Africa's investment property market, with notable shifts in provincial preferences that could reshape the landscape for investors.
Last week, Property Marketing expert and Rainmaker Marketing’s Director, Stefan Botha said from December into the month of January 2025, they have seen a considerable upswing in sales by consumers with reports from real estate developers like Devmco Group and developments like Seaton, BlackBrick Umhlanga, and others reporting higher than expected sales figures.
“The strong collaboration between key players in the development sector and government to unlock catalytic projects is also promising, particularly in the Western Cape with The Bridge in Stellenbosch, and in KwaZulu-Natal with Sibaya Precinct and Club Med on the North Coast,” Botha said.
FNB senior economist Siphamandla Mkhwanazi said if the positive momentum on sentiment endures, South Africa should see buying activity strengthen in higher-priced segments.
“Importantly, declining borrowing costs should stimulate demand from interest-rate sensitive buyers, including first-time buyers. This will have a stronger impact on demand for affordable property.
“Overall, buying activity should be stronger in 2025, across all segments of the market. This will support stronger growth in property values, and further boost consumers’ balance sheets.
“This means, we will see more positive growth on homeowners’ wealth this year, which in turn reinforces their overall financial standing,” Mkhwanazi said.
FNB Commercial Property Finance said the events of recent years ranging from economic uncertainty to municipal inefficiencies, have shaped a cautious but hopeful outlook for 2025.
It added that the sector must focus on leveraging emerging opportunities, such as semigration and industrial property demand while mitigating risks through collaboration with the government and investments in resilience.
INDEPENDENT MEDIA PROPERTY