Joburg property's hottest spring in years as prices soar past inflation

Johannesburg's property market is on fire this spring, with home prices finally breaking free from years of stagnation to deliver real growth that's outpacing inflation for the first time since the pandemic.

The city's strongest buying season in years is unfolding as warmer weather coincides with a perfect storm of falling interest rates, surging buyer confidence, and chronic housing shortages – creating a seller's market that industry insiders say resembles the mini-boom of 2021.

"Buyer interest in Johannesburg has really accelerated in recent months, with our agents reporting more show day traffic, stronger offers and faster conversions into sales than at any time since before the pandemic," says Stephen Whitcombe, MD of property group FIRZT Realty, which has seen sales have climbed every month since January.

FIRZT’s anecdotal findings continue a trajectory reported by BetterBond mid-August. Home loan applications for that month surged 12% year-on-year to their highest level since late 2022.

The latest FNB Residential Property Barometer shows that freehold prices jumped 3.7% and sectional title properties soared 3.8% – both comfortably above July's 3.5% inflation rate.

Whitcombe said this marks a dramatic turnaround for a market that only turned positive in August 2024 after years in the doldrums.

Now, with five consecutive interest rate cuts filtering through household budgets, the momentum is building fast, said Whitcombe.

Sectional title properties are leading the charge, attracting everyone from young professionals and first-time buyers to downsizing seniors and foreign investors hunting for a Johannesburg base ahead of November's G20 summit, said Whitcombe.

Yet, supply can't keep up.

While 5,472 new flats and townhouses were completed nationally in the first half of 2025, building approvals have plummeted 39.9% in Gauteng, FIRZT noted. "The overall picture is one of constrained supply that will support rising prices," warns Whitcombe.

FNB Senior Economist Siphamandla Mkhwanazi confirmed the shift last month.

"For the first time in the post-pandemic era, equity values generated by sectional title properties marginally outpaced those of freestanding homes."

Mkhwanazi attributed this to companies embracing back-to-office trends, reducing demand for pandemic-era larger spaces.

The buying frenzy is being fuelled by multiple factors beyond lower borrowing costs.

South Africa's improved political stability, its growing safe-haven status globally, and homeowner sentiment climbing to 86% positive are all stoking demand, said Whitcombe.

BetterBond's latest data shows the average home purchase price hit a record R1.6 million in July, though buyers are having to dig deeper for deposits – now averaging R311 000, up 14% from the previous quarter.

With families traditionally using spring to plan relocations for new jobs and school placements, and Johannesburg's prices still competitive compared to other metros, all signs point to a bumper season ahead, said Whitcombe.

"Current and projected supply dynamics support a sustained upward trend," said Mkhwanazi, as the city prepares for what could be its strongest property market performance in years.

Mkhwanazi said, “these developments reinforce our view of a broader residential price cycle, underpinned by easing inflation, lower borrowing costs, and modest real wage gains”.

IOL Business