By: Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole, Koketso Mano
Estate Agents Survey 2Q25: A market treading water
The FNB Estate Agents Survey results for 2Q25 reveal a slight slowdown in the residential property market amid heightened global and domestic political uncertainty. Overall sentiment among estate agents dropped to 62%, and the market activity index fell to 5.9 from 6.3 in the previous quarter. The average time a property spent on the market, however, remained unchanged at 12 weeks and one day. Below, we summarise key insights from the survey.
The survey continues to highlight a dual-speed market. The affordable housing segment (properties listed for under R750 000) showed significant resilience, with its activity index at a higher 6.2 and agent sentiment climbing to 72%. In contrast, the traditional, higher-priced market experienced a sharper decline in both activity and confidence. Expectations for the third quarter also reflect this divergence: 66% of agents in the affordable sector anticipate growth, buoyed by a recent interest rate cut, while only 23% in the traditional market share this optimism, citing the winter slowdown and economic uncertainty as concerns.
Regional dynamics presented a varied landscape. Gauteng, the largest market, saw a slight dip in activity and a notable nine-percentage point drop in agent satisfaction to 66%, though it maintains the highest activity levels in the country. The Western Cape demonstrated stability, with sentiment remaining strong at 67% despite a notable decrease in activity. Conversely, KwaZulu-Natal and the Eastern Cape saw market activity improve but experienced declines in agent sentiment, suggesting underlying concerns about factors like infrastructure.
Financial pressure, accounting for 21% of all sales, remains a significant reason for selling. Downsizing due to life stage changes was the most common reason for 24% of transactions. Emigration-related sales stayed low at 5%, well below the long-term average of approximately 8%. On the buyer side, first-time buyers played a significant role in the affordable market, making up 46% of purchases in that segment and 26% of the overall market, up from 24% previously. Buy-to-let investor activity also saw a slight increase, rising to 12% of total transactions from 10%, with a strong focus on the affordable sector. Looking ahead, we expect increased participation from both first-time buyers and investors as interest rate cuts continue, and market uncertainty eases.
In conclusion, the report paints a picture of a market treading water, influenced by seasonal factors and ongoing economic and political uncertainty - particularly around the global outlook and stability of the Government of National Unity (GNU). While recent interest rate reductions have provided a boost to the affordable housing segment, a broader and more sustained recovery across the market will likely depend on further rate relief, enhanced political stability, and meaningful economic reform.
Week in review
SA's gross foreign exchange reserves lifted to $68.4 billion in June, up from $68.1 billion in May. The increase in foreign reserves and the international liquidity position was mainly on account of asset price movements and valuation gains. These were countered by a lower gold price and foreign currency payments made on behalf of government.
Manufacturing output (not seasonally adjusted) increased by 0.5% y/y in May, following a 6.4% (revised from 6.3%) contraction in April. Seasonally adjusted output rose by 2.0 % m/m, increasing the momentum from 1.7% (revised from 1.9%) growth previously. This data has solidified the better start to 2Q25. However, average growth over the three months to May remains in contractionary territory. Without further gains in June, manufacturing could continue to drag on economic growth - highlighting unfavourable operating conditions and aligning with our assessment of downside risks to the near-term economic growth outlook.
Week ahead
On Tuesday, data on mining production for May will be released. Mining production (not seasonally adjusted) remained weak into the start of 2Q25, with output contracting sharply by 7.7% y/y in April following a 2.5% decline in March. This marked the sixth consecutive month of annual decline. The outcome was worse than the Bloomberg consensus forecast of a 4.0% decline and largely reflected the disruptive impact of breakdowns and third-party supply issues affecting Platinum Group Metals (PGMs). Seasonally adjusted mining output rose modestly by 0.6% m/m, a moderation from the 3.6% monthly increase recorded in March.
On Wednesday, data on retail sales for May will be released. Retail sales rose by 5.1% y/y in April, up from 1.2% in March. On a monthly basis, retail volumes rebounded by 0.9% following a 0.3% decline in March. Despite April's strong performance, retail activity over the past three months remains 0.5% lower compared to the preceding three-month period, suggesting that household spending may be losing momentum. The spike in annual sales likely reflects holiday-related spending and two-pot pension withdrawals coinciding with the new tax season.
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