South Africa's residential property market set for revival after FATF greylist exit

South Africa’s residential property market could be reinvigorated with easing transaction challenges, reducing borrowing costs, and restoring confidence among both local and international investors. 

This follows the country’s removal from the Financial Action Task Force (FATF) greylist. 

Lower borrowing costs for both government and consumers create opportunities for economic expansion and job creation, with knock-on benefits for household spending and housing demand, says Bradd Bendall, BetterBond’s national head of sales. 

He says, furthermore, property developers are likely to find it easier to secure foreign investment for residential projects, helping to deliver much-needed infrastructure and supply to support a strengthening market. “Investors are once again likely to view South Africa as a lower-risk environment for property investment.

“Combined with other positive market indicators, the delisting puts the property market on the trajectory to continued growth as we head toward year-end, setting the stage for a solid start to 2026.” 

BetterBond, a mortgage originator, as noted in BetterBond’s October Property Brief, high value-added exports to Europe surged 24% year-on-year to R233 billion, and tourism arrivals reached 1.3 million between January and July, proving encouraging signs of an economy gaining ground.

Bendall says there is one more opportunity for a positive shift in the prime lending rate when the South African Reserve Bank (SARB) meets in November. He says this delisting could be a factor in favour of supporting one more rate cut this year.

“A firmer currency, combined with moderating inflation, has already improved the outlook for another interest rate cut before year-end.” 

The company says the removal of South Africa from the FATF greylist is likely to enhance the country’s reputation as a lower-risk investment destination, encouraging renewed local and international investment in the property sector. 

It says increased market confidence will support broader economic growth, which could ultimately contribute to lower interest rates and a more accommodative lending environment.

“This will make it easier for more aspiring buyers to qualify for home loans. BetterBond’s latest Property Brief (October) shows that home loan applications increased by 14.6% year-on-year.”

BetterBond adds that this is the highest level it has been since early 2022, before the county was greylisted. It says the five consecutive repo rate cuts ignited buyer activity, and this delisting will certainly drive market activity. 

Bendall says buyers at the upper end of the market will also welcome the delisting, as it will reduce the complexity of and due diligence costs involved in high-value property transactions. For sellers, he says, improved investor confidence boosts the demand for property, and this will make it easier to achieve higher sales prices. 

The delisting is also anticipated to strengthen consumer sentiment, likely stimulating greater buying and selling activity across the residential property market, he says. 

According to BetterBond, the greylisting of SA in 2023 damped investor confidence in the country. The broker says this adverse action, coupled with the complicated transaction processes that ensued because of more stringent monitoring, contributed to some suppression of market activity.

“Financial institutions and professionals in the property sector, including brokers and estate agents, had to perform rigorous background checks and meet enhanced compliance requirements, which resulted in additional costs and delays.” 

Local companies, including property developers, also found it more expensive and cumbersome to access global funding, Bendall says. “Higher borrowing costs affected property transactions and hampered the completion of property developments.”

The company told this publication that SA’s delisting sends a strong signal to both local and international investors that the country meets global financial standards. Thus, it says this removal is expected to play a significant role in restoring trust in the property market, reinforcing the country’s status as a reliable, lower-risk investment option. 

The decision of the Financial Action Task Force (FATF) to remove South Africa from the “grey list” is strongly positive for the economy as a whole and will also add impetus to housing demand and the recovery of the real estate sector, says Berry Everitt, CEO of the Chas Everitt International property group.

The CEO noted that whether they realised it or not, all South Africans have been negatively affected since SA was placed on the “grey list” in February 2023 and put under increased scrutiny by the FATF for anti-money laundering and counter-terror financing (AML/CFT) deficiencies.

“However, government and the business sector have worked hard to achieve the required improvements in areas such as beneficial ownership transparency, supervision of non-financial businesses and professions (including real estate agents) and legal and accounting trust frameworks.

“And what they have achieved with the removal of SA from that list is an improved risk profile and increased investor confidence in our financial system and its institutions, which will also affect all South Africans.

"For a start, it will mean lower borrowing costs for the government, SOEs, municipalities and other entities, and possibly the opportunity to negotiate lower rates of interest on existing debts. This should make it easier to restore and even improve vital trade infrastructure like railways, harbours and roads.

The international property group said getting off the list should also encourage more direct local and foreign investment in SA, not just in bonds and equities but in new businesses, especially now that the African Continental Free Trade Area (AfCFTA) agreement is starting to gain momentum.

“Companies around the world are looking for ways to access the opportunities inherent in that agreement and in growth markets across Africa and are well aware that SA is one of the best gateways to those markets.”

The company says both infrastructure projects and the establishment of new businesses will, he says, lead to much-needed job creation and significant new housing demand over time, but even before that, lower national debt will reduce the need for the government to raise corporate and personal taxes and help to improve housing affordability for the average household. 

“We believe it will also improve consumer sentiment about the future of SA and are thus expecting the real estate market recovery to gather additional speed over the next few months.”

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