Buy now or miss out: Johannesburg property market heats up

In a decisive move that could reshape the real estate landscape in Johannesburg, the South African Reserve Bank has cut interest rates by 25 basis points, bringing the home loan interest rate to an unprecedented low of 10.75%—the most favourable level since February 2023.

This announcement has sparked urgent calls from property experts for prospective buyers and investors to act swiftly in this buoyant market.

Denese Zaslansky, CEO of FIRZT Realty Group, emphasised the growing momentum in property demand since rates began to decline in September last year. “We have witnessed a remarkable 38% surge in sales and an average price increase of 6% over the past six months,” she noted, pointing out that desirable locations in Johannesburg are already seeing diminishing stock levels.

The implications of today’s rate cut are significant for both first-time buyers and seasoned investors. Given that the current average home price in the city is approximately R1.6 million, qualifying for a home loan currently requires a gross monthly income of about R54,200. This figure is R3,600 less than it was this time last year, offering a golden opportunity for many who may have previously felt locked out of the market.

Zaslansky warns, however, that time is of the essence. “If property prices rise by just 5% in the next year, prospective buyers will face higher monthly bond repayments and will need to increase their monthly income by R2,700 to qualify for a home loan, should interest rates remain stable. This will erode the advantages gained from the recent rate cuts,” she cautioned.

Today’s interest rate decline comes in response to inflation metrics consistently lingering below the Reserve Bank’s target range of 3% to 6%. With inflation reported at 2.8% in April, and economic growth failing to gain real traction, the decision reflects a broader shift aimed at boosting consumer confidence and justifying spending amid turbulent market conditions.

According to Zaslansky, a turnaround is imminent. “We are highly optimistic that we will see rapid advancements in the property market as demand escalates. The number of new developments sprouting across Johannesburg is a clear indicator of rising investment in property, stimulating both job creation and overall economic growth in the region.”

With the property market in Johannesburg offering rare opportunities for savvy buyers, Zaslansky’s message is clear: the time to act is now. Ignoring this window may mean relinquishing the chance to secure a home at today’s favourable rates and prices—an opportunity that may not last long as the market continues to evolve.

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