Renting vs Buying in 2025

Renting vs Buying in 2025- When waiting makes (and doesn't) make sense

The decision to rent or buy a home is one of the biggest financial choices most people face and, with shifting interest rates, fluctuating property prices, and evolving economic conditions, the current market presents unique challenges and opportunities for potential buyers.

Should you take the plunge into homeownership now, or would renting for a few more years be the smarter move?

Lew Geffen Sotheby’s International Realty breaks down the key factors—market trends, interest rates, and price growth—to help you decide whether buying in 2025 makes sense or if waiting could save (or cost) you money.

The South African Property Market in 2025: Key Trends

1. Slower Price Growth, But Regional Variations

South Africa’s property market has seen modest growth in recent years, with some areas outperforming others. In 2025, experts predict:

• Major metros (Johannesburg, Cape Town, Durban): Many areas will see steady but slower price increases (around 3-5%) due to high demand and limited stock.
• Secondary cities (Pretoria, Bloemfontein, Port Elizabeth): These may offer better affordability but with slower appreciation.
• Semigration trends continue, with buyers flocking to the Western Cape for perceived better services and lifestyle, keeping prices elevated.

If you’re buying in a high-demand area, waiting could mean higher prices later. In slower-growth regions, you may have more flexibility.

2. Interest Rates: A Mixed Outlook

The South African Reserve Bank (SARB) kept interest rates high for a few years to combat inflation, but since last year, they have implemented a series of interest rate cuts with the most recent being to 7.5% in January 2025.

What this means for buyers:

• If rates drop: Lower monthly bond repayments could make buying more attractive.
• If rates stay high or rise further: Affordability remains strained, making renting a safer short-term option.

Ultimately, if you can secure a mortgage at a lower rate, buying becomes more appealing. Otherwise, renting may be the better financial cushion.

3. Affordability vs. Rising Costs

Despite slower price growth, many South Africans still struggle with affordability due to:

• High deposit requirements(typically 10-20%)
• Rising utility and municipal costs(especially in metros)
• Stagnant wage growth and limiting borrowing power

Meanwhile, rental prices have increased in major cities, but renting can still be cheaper than bond repayments in the short term.

If you can’t comfortably afford at least a 10% deposit and monthly bond costs, renting while saving more may be wise.

When Buying in 2025 Makes Sense

1. You’ve Found a Well-Priced Property in a Growth Area: If you’ve identified a home in an area with strong infrastructure development, good schools, or economic activity (e.g., Cape Town’s southern suburbs or Johannesburg’s northern suburbs), buying now could secure future value.
2. You Can Lock in a Lower Interest Rate: If SARB further cuts rates in 2025, securing a home loan at a lower rate could save you thousands over the loan term.
3. You Plan to Stay Long-Term (5+ Years): Homeownership pays off over time. If you’re settling down, buying eliminates rental hikes and builds equity.
4. You Have a Stable Income and Emergency Savings: If you have a secure job, a good credit score, and savings for emergencies, buying is less risky.

When Waiting to Buy Could Be Smarter

1. You’re Unsure About Job Stability: With South Africa’s unemployment rate still high, committing to a bond without job security is risky. Renting offers flexibility if you need to relocate.
2. You’re in a High-Interest Rate Environment: If rates are raised again (above 11%), waiting for potential cuts could lower your monthly payments significantly.
3. You’re Still Saving for a Deposit: A larger deposit reduces your loan amount and interest burden. If you’re close to 15-20%, waiting a year could make financing easier.
4. You Want to See How the Market Develops: If property prices are stagnant or declining in your target area, waiting could lead to better deals—especially if more sellers enter the market.

Renting in 2025: Pros and Cons

Pros:

• Flexibility– Easier to relocate for jobs or lifestyle changes.
• Lower Upfront Costs– No bond fees, transfer duties, or maintenance expenses.
• Investment Opportunities– Money saved from renting could be invested elsewhere (e.g., stocks, a side business).

Cons:

• No Equity Building– Rent payments don’t contribute to ownership.
• Rental Increases– Landlords may hike rents annually.
• Limited Control– No freedom to renovate or customise.

Final Verdict: Should You Buy or Rent in 2025?

Buy Now If:

✔ You’ve found a reasonably priced property in a high-growth area.
✔ Interest rates remain lower, improving affordability.
✔ You have stable income, a strong credit rating and enough savings for upfront costs.

Wait and Rent If:

✔ Job security is uncertain.
✔ Interest rates are still too high for comfort.
✔ You need more time to save for a deposit.

The rent vs. buy decision depends on your financial situation, location and long-term goals and while buying in 2025 could be a smart move for some, waiting might save others from financial strain.

If you’re financially ready and find the right property, buying can be a solid investment. But if the numbers don’t add up yet, renting while preparing for a future purchase may be the wiser choice.

Ultimately, the decision to rent or buy should be based on individual financial readiness, lifestyle preferences and long-term goals.