The South African property market in 2025 offers a host of opportunities for property investors. Creating the best property investment strategy is critical to obtaining the best returns from your investments. IGrow Wealth is known as a leader in property investment strategy, offering a team of specialised professionals with a wealth of knowledge to help you maneuver through the landmines of the property world. IGrow offers tailor-made property investment strategies, with a tax accounting and legal team on hand, bond origination, and financial planning, as well as tenant and property management. In this article, we look deeper into the 5 best property investment strategy ideas for 2025. We will focus on IGrow’s tried and trusted service offering. We also provide insights to help investors make informed property purchases.
The 5 Best Property Investment Strategy Ideas we discuss here are:
- Economic trends affecting South African real estate growth
- Interest rates are set to stabilise/decrease and optimising financing in 2025 is crucial
- Tax laws such as Section 13sex tax incentives influence investment strategies
- Infrastructure boosts and expands cityscapes, making economic hub property investments a sound choice
- Purchasing off-plan or newly built properties is an especially appropriate investment strategy in 2025
1. Economic trends affecting South African real estate growth
The South African economy is considered dynamic and constantly evolving. Currently, we are seeing trends such as growth in technology, recovery from the COVID pandemic, and continued urbanisation affecting the property market. These trends open the door to investors looking to purchase property as a secure way to generate rental income and build long-term equity.
Why will capitalising on economic trends work?
Growth within various sectors of the South African economy means there are areas where significant industrial expansion and development will lead to a boom in housing demand, as people move to where there are employment and training opportunities.. Urbanization, where people move to economic hubs to seek employment, is a clear trend for 2025, with migration to cities bound to continue, driving the demand for residential and mixed-use property.
2. Interest rates are set to stabilise/decrease and optimising financing in 2025 is crucial
Interest rates have a direct influence on property for sale prices and long-term affordability. To make the best property investment in South Africa, grasping financing options is key to your success.
Why will interest rate stability and optimising your property financing benefit your strategy?
According to the Monetary Policy Committee (MPC), “the interest rate [has been lowered] by 25 basis points [by the Reserve Bank]. The prime lending rate therefore changes to 11.25%… Against this backdrop, the MPC decided to reduce the policy rate by 25 basis points, to 7.75%, with effect from 22 November 2024.” (Source)
What this means for investors, is that a bond worth R1 million will accumulate savings of R208 a month, or R2 500 a year. Standard Bank anticipates three rate cuts of 25 basis points each, one was seen in November 2024 and two cuts are expected in the first 6 months of 2025, with better long-term savings, predicted. (Source)
Toni Anderson, Standard Bank Home Services head, says “if these expected cuts reduce rates by a total of 100 basis points, homeowners could save R833 per month on a R1 million property in the next year.” (Source)
Decreased interest rates will lower monthly bond repayment costs for property investors. There will be more financing solutions available going forward, such as, embarking on partnerships, and the ability to make cash purchases, which will give investors a leg up.
IGrow supports optimising your property financing
The IGrow bond origination team works in partnership with major financial institutions to attain the best financing deals for clients.
3. Tax laws such as Section 13sex tax incentives influence investment strategies
The Section 13sex tax law is still a key tool for South African property investors to save on tax in 2025. This tax incentive lets you deduct 5% of the purchase price (minus the land value) and applies specifically to new/unused residential buy-to-let properties, yearly for 20 years. If your property falls within an Urban Development Zone (UDZ), the deduction improves to 10% yearly.
According to SARS: “Section 13sex provides for an allowance on any new and unused residential unit or new and unused improvements effected to existing residential units that are used by the taxpayer solely for purposes of trade. The unit or improvement [alteration or renovation] must be owned by the taxpayer and it must have been acquired, or the erection commenced, on or after 21 October 2008.” (Source)
What are the criteria that apply to this tax law?
According to IGrow Wealth Investments, the Section 13sex tax law means that the taxpayer must own a minimum of 5 residential units (such as five apartments). All these investment properties must be located in South Africa. Residential units have to be new or unused. In other words, investors who buy a flat that was previously occupied wouldn’t qualify for this tax incentive. The units involved have to be used only for trade purposes (such as for residential rentals). This means the cost of housing for personal use won’t benefit from this law
How much will you be able to save?
Example: Properties that cost: R1,000,000 (excluding land):
- The Annual Deduction will be: 5% = which equates to R50,000
- The Tax Savings, in this case, (45% tax bracket): 45% of R50,000 = R22,500 annually
With five property units, you have the potential to save R112,500 yearly and more than R2.25 million over 20 years! (Disclaimer: these figures are subject to changes and a number of factors, including individual income tax bracket, interest rates, deposits paid, and bond conditions set by banks if a loan is taken out).
4. Infrastructure boosts and expands cityscapes, making economic hub property investments a sound choice
South Africa is set to see major infrastructure improvements this coming year. The improvements include new transportation links, urban growth, and upgrades to utilities- which all affect the overall South African property market.
Why will better infrastructure be a touchpoint to consider in your property investment plan?
Areas that used to be hard to reach, will now become accessible, with improved infrastructure such as public transport and new schools. This means previously borderline areas will become more desirable to tenants. Property valuations will be boosted for those properties situated near new infrastructure.
IGrow capitalises on infrastructure-expanding cityscapes
IGrow supports clients in benefiting from this property market change. We identify properties found in these developing areas as prime property investment opportunities that can be incorporated into 2025 investment strategies.
5. Purchasing off-plan or newly built properties is an especially appropriate investment strategy in 2025
Purchasing a property off-plan—which means, construction isn’t complete yet—is still an effective investment strategy in the 2025 South African property landscape. This idea provides numerous benefits investors can enjoy, as they aim to maximise returns.
Off-plan properties are priced lower than market value. This means an investor can purchase a property at a cheaper rate, while at the same time, the property’s value appreciates throughout the construction phase.
In the case of buying off-plan, there will be no transfer duties, this reduces overall expenses that the investor has to prepare for. Transfer duties can be hefty, so this is a perk for investors. Off-plan properties found in new developments are modern and found in prime suburbs, attracting tenants easily. This in turn means a secure rental income stream can be established.
How can IGrow Wealth Investments assist you in buying off-plan properties?
The property rental agents at IGrow have exclusive access to off-plan developments in South Africa. View this off-plan development- a partnership with IGrow. This unique, customisable off-plan development, in Pretoria, is ready for occupation in mid-2025. You can design your dream home by selecting from optional additions (to a standard home in the development) that will suit your needs.
The IGrow team sources properties in high-growth locations with high demand from tenants. IGrow’s expert team seeks valuable off-plan investment property for sale and secures financing on your behalf by negotiating with major banks. They will also manage your rental property portfolio to ensure overall long-term wealth creation.
IGrow investment services offered in 2025
IGrow Wealth Investments uses a holistic approach to property investment with end-to-end services that ensure clients have successful investment portfolios.
Our services include tailoring financial planning. Financial planners will assess your finances and structure your investments well. The IGrow tax planning team helps investors decrease liabilities and capitalise on returns. IGrow’s team also does in-depth market research to find high-growth areas in the property market for investment strategy plans.
Jacques Fouché (IGrow’s Founder and CEO) sheds light on insights into property investment strategies in 2025
Fouché highlights the value of creating a solid investment strategy for your rental property and states that the IGrow team stands by you on your property investment journey.
“The collective aim of the IGrow Group of companies is to help you achieve financial independence and lasting wealth through a buy-to-let property investment strategy. Whether you are a beginner or an advanced investor, we aim to help you successfully manage every challenge you’ll face through this investment journey. Our focus remains on investing in residential real estate, where our current investors consistently achieve above-average rental income and capital growth yields.”
Concluding Thoughts
By standing together with IGrow Wealth Investments’ expert team and by taking heed of these 5 best property investment strategy ideas, you are bound to have a successful rental property investment experience in 2025.
Book a consultation with an IGrow Wealth Strategist today and make 2025 your year for successful property investment strategies that get the results you need!
