South Africa’s property market in 2026: what to expect

As we move into 2026, South Africa’s property market feels like it’s turning a corner. After a tough few years of high interest rates, rising costs, and cautious buyers, there are clearer signs that activity is starting to pick up again. This won’t be a “boom year”, but it does look like a year of better balance. Lower interest rates, improving sentiment, and steady demand are creating a more workable market for both buyers and sellers. Understanding what is likely to drive the market will make it easier to guide clients and keep deals moving.

Interest rates: still the biggest driver

Interest rates remain the main talking point for buyers and sellers alike. By the end of 2025, the SARB had cut the repo rate to 6.75%, marking the sixth cut in the current cycle. A decision was made in January to hold rates at their current level. That being said, most economists expect further easing in early to mid-2026, with the repo rate possibly reaching around 6.25% by year-end.
There’s some debate about how quickly this will happen. While many expected a cut in January 2026, sticky global risks and recent inflation data are likely the reason that the SARB chose to move more cautiously.

What this means for the market in 2026:

We’re likely to see gradual rate cuts rather than big, dramatic moves. That’s good news. Even small reductions improve affordability, boost confidence, and make it easier for buyers to qualify for bonds. The impact will be steady and positive rather than explosive – exactly what a healthier property market needs.

The economic backdrop: constrained, but stable

South Africa’s economy still faces challenges. Business activity softened towards the end of 2025, and structural issues like energy supply, unemployment, and logistics remain.

That said, there are some encouraging signs heading into 2026:

  • The rand ended 2025 stronger and this trend has extended into 2026 thus far. This will help confidence and buying power should it persist.
  • Foreign reserves have improved, and bond markets remain stable.
  • There’s continued international interest in South African assets.
  • The government has committed R1 trillion to infrastructure spending, especially in energy, transport, and water.

While economic growth will remain modest, these factors help create a more stable environment for property.

What this means for the market in 2026:

The economy may not be firing on all cylinders, but it is stable enough to support ongoing property activity. Infrastructure investment, in particular, could create new opportunities in industrial, logistics, and mixed-use developments over time.

Market activity: different segments, different stories

Residential market: steady and sustainable

After stronger house price growth in 2025, 2026 is expected to be calmer and more balanced.

What to expect in 2026:

  • House price growth of around 3%–4%, in line with inflation
  • Continued strong demand for sectional title properties, especially from first-time buyers
  • High transaction volumes in homes priced below R1 million
  • Ongoing strength in the luxury market, particularly in the Western Cape and coastal lifestyle areas

This is a market driven by real demand, not speculation – which makes it more sustainable.

Buyer sentiment: cautious, but still positive

By the end of 2025, buyer confidence had improved noticeably. Property remains a trusted long-term investment for many South Africans.

  • First-time buyers continue to grow in importance, already making up close to half of bond applications
  • Lower interest rates and stable inflation are encouraging new entrants
  • Foreign buyers remain active in high-end and lifestyle markets, especially in the Western Cape and parts of Gauteng

What this means for agents in 2026:

Buyers are active, but they’re value conscious. Pricing correctly and managing expectations will be key. Deals are happening, just not at any price.

Global and local influences to watch

Global interest rates

Global monetary policy, especially in the US, will still influence capital flows and the rand. A general global easing cycle in 2026 could support further local rate cuts.

The rand and foreign buyers

A stable or stronger rand helps keep inflation under control and makes South African property attractive to offshore buyers. This supports demand, especially in the mid- to high-end market.

Infrastructure spending

The government’s infrastructure plans could unlock new property corridors and support long-term growth in industrial, logistics, and transit-linked developments. While the biggest impact may be felt later, confidence tends to move ahead of actual construction.

Conclusion: 2026 is a year of opportunity, not excess

The South African property market in 2026 is shaping up to be steady, balanced, and more predictable.

This isn’t about runaway prices or frenzied buying. Instead, it’s about:

  • Improved affordability
  • Better buyer confidence
  • Consistent demand in key segments
  • A more stable economic and interest-rate environment