At Watchprop, we pride ourselves on staying ahead of market trends to deliver exceptional property management services across South Africa's residential and commercial sectors.
The latest Rode Report for Q3 2025 (Volume 36, No. 3), published by Rode Publications & Media, offers a comprehensive snapshot of the property landscape, highlighting signs of recovery and resilience amid economic shifts. As a trusted partner in property management, we’ve distilled the key findings from this report and explored their implications for investors, landlords, tenants, and property owners.
Overall Market Sentiment: Optimism Amid Stability
The report paints a picture of a property market gaining momentum after years of subdued performance. Editor Kobus Lamprecht notes in the foreword that house price growth is accelerating, driven by lower interest rates and a constrained supply of new housing. This is a welcome shift, signalling improved affordability and demand. Capitalisation rates (cap rates) remain largely stable across sectors, suggesting investor confidence without dramatic volatility. For property managers like us at Watchprop, this stability means opportunities to optimise yields through efficient operations, such as negotiating better leases or reducing vacancies.
The report also introduces a groundbreaking survey in collaboration with the South African Multi-Family Residential Rental Association (SAMRRA), providing the first-ever data on cap rates for purpose-built to-rent apartment blocks. This addition is particularly relevant for the residential rental market, offering benchmarks for valuing multi-unit properties.
Residential Property: Rising Prices and Vacancy Pressures
The residential sector shows mixed but promising signals. Key highlights include:
- House Prices on the Upswing: House prices are "looking healthier," with growth speeding up due to favourable interest rates and limited new supply. This could translate to higher property values for homeowners and investors, but it also underscores the need for strategic management in rental portfolios to capitalise on demand.
- Flat Vacancies Increasing: In Chapter 9, flat vacancies rose in Q3, potentially reflecting softer demand in certain urban areas. Rentals for standard ("affordable") and upmarket units are detailed, with parking rentals also surveyed. For residential property managers, this signals the importance of proactive tenant retention strategies, such as timely maintenance and competitive pricing.
- SAMRRA Apartments: Vacancies in SAMRRA-managed apartments increased (Chapter 10), but the new cap rate data (around 8-10% in surveyed cities) provides valuable tools for assessing investment viability. At Watchprop, we see this as an opportunity for owners of multi-family units to refine their strategies—our team can assist with vacancy audits, marketing vacant spaces, and ensuring compliance with rental regulations to minimise downtime.
Overall, the residential market's relevance lies in its sensitivity to economic factors like interest rates. With building activity in residential construction moving into positive territory (Chapter 12), we anticipate more supply in the pipeline, which could stabilise vacancies. Watchprop recommends regular market reviews for landlords to adjust rents and improve occupancy rates, ensuring steady cash flow.
Commercial Property: Strength in Offices and Industrials
The commercial segments demonstrate robustness, with several positive trends:
- Office Market Recovery: Office vacancies declined in Q3 (Chapter 6), a sign of returning demand, particularly in decentralised nodes of major cities. Cape Town's office rentals continue to "fly high" (Chapter 5), outperforming other regions, while escalation rates on new leases and operating costs remain moderate. This bodes well for commercial landlords, but with typical rent-free periods and parking rentals varying by location, effective management is key to maximizing returns.
- Industrial Sector Shining: Industrial properties continue to show strength, with rentals and vacancies holding firm. Stand values are recovering, reflecting growing demand for logistics and manufacturing spaces. Escalation rates for industrial leases and operating expenses are stable, making this a resilient asset class amid supply chain shifts.
- Listed Property and Retail: Property shares excelled in Q3 (Chapter 4), delivering strong total returns over recent periods. Cap rates for shopping centres and street-front shops showed minimal changes, indicating steady investor interest. While retail isn't the report's primary focus, the data on cap rates (e.g., 7-9% for prime centres) highlights opportunities in well-managed commercial spaces.
For commercial property owners, these trends emphasise the value of data-driven management. At Watchprop, we leverage reports like Rode's to advise on lease renewals, cost controls, and space optimisations—helping clients reduce vacancies and boost net operating income in a competitive market.
Broader Implications and Watchprop's Role
The Rode Report underscores a market in transition: residential growth fuelled by macro factors, commercial stability in offices and industrials, and overall cap rate steadiness signalling cautious optimism. However, challenges like rising flat vacancies remind us that local nuances matter—Cape Town's office boom contrasts with softer demand elsewhere.
As a full-service property management company, Watchprop uses these insights to deliver tailored solutions.
Contact us at property@watchprop.co.za or 0219146660 for assistance in managing your investment.
Stay informed, stay ahead— with Watchprop.
Source: Rode Report 2025:3, published October 2025. All data referenced is based on Rode's surveys and should be used with professional advice.
