South Africa's FATF greylist removal: positive effects on the property market ahead

While the effect of South Africa’s FATF delisting is unlikely to be immediate, it will have a net-positive effect on property market performance overall. 

The delisting is great news for the South African property market, says Adrian Goslett, regional director and CEO of REMAX Southern Africa. 

“This removes the perception that South Africa is a high-risk country for investments, which will go a long way towards restoring investor confidence and bolstering economic growth. For some time now, the South African property market has been hampered by poor economic growth.”

The real estate company says that with sentiment improving, there may be a shift in property demand, both foreign buyer interest as well as institutional investor activity.

“Sector players should be alert to opportunities but also be prepared for increased competition in the months ahead,” says Goslett. 

On Tuesday, the Financial Sector Conduct Authority (FSCA) welcomed the FATF decision to remove South Africa from its list of jurisdictions under increased monitoring.

The independent institution established by statute to ensure a fair and stable financial market says this important decision recognises the country’s significant progress in strengthening its anti-money-laundering (AML) and counter-terrorist-financing (CFT) frameworks.

The FSCA says it views South Africa’s removal from the grey list as a positive step for investor confidence and financial sector resilience.

“The delisting reduces reputational and transactional risks for South African firms and strengthens the country’s attractiveness as a destination for responsible investment. However, ongoing vigilance, effective enforcement, and cooperation between regulators and the private sector remain critical to maintain the gains achieved.

"The FSCA will continue strengthening its efforts in this regard," says FSCA Commissioner Unathi Kamlana. 

Broader market dynamics have also started shifting in favour of renewed homebuyer activity, says Bradd Bendall, BetterBond’s national head of sales. 

He said a consistent decline in the Construction Input Price Index (CIPI), which indicates lower building material and construction costs, combined with an increase in the Residential Property Price Index (RPPI), has narrowed the buyers’ market range.

“This trend points to improved demand from prospective buyers, while lower input costs align with the country’s record-low producer price index.”

Meanwhile, the Western Cape is said to have continued to attract the lion’s share of new housing investment, accounting for 38% of the value of all residential building plans passed this year.

Between January and July this year, the total value for building plans passed nationally has reached R26 billion, slightly below last year’s figure. 

 “Data from BetterBond’s October Property Brief reveals that the province accounted for more than a third of the total value of building plans passed by major metros and municipalities in the first seven months of the year,” said Bendall. 

“It also recorded double-digit year-on-year growth, underscoring the increased demand for homes in this province.”

Building costs decline

The lower building costs meant good news for developers and homeowners planning to build, Bendall said.

“This not only improves affordability but also supports continued confidence in the market. We’re seeing that optimism reflected in the number of bond applications and property transactions.” 

As reflected in BetterBond’s home loan index for the third quarter of the year, bond application volumes have increased by 11.6% quarter-on-quarter and by 14.6% year-on-year. Since bottoming out towards the end of 2022, the volume of home loan applications has increased by 26%. 

Affordability

The bond originator said that for anyone thinking about buying or building, these are encouraging signs.

“We’re seeing an improving balance between affordability and, as a result of five cuts in the prime lending rate since 2024-demand, and confidence, particularly in the Western Cape, where lifestyle and long-term value continue to drive investment.”

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