With interest rates holding steady, South Africa’s resilience continues to shine through. Despite ongoing economic pressures, the property market remains remarkably stable, underpinned by steady demand and a long-term outlook from both buyers and sellers. This consistency not only reflects the adaptability of South Africans, but also reinforces property as a dependable investment — one that continues to offer opportunity, even in a changing landscape.
After a prolonged period of elevated borrowing costs, demand is beginning to recover and price growth is stabilising. However, affordability remains a key constraint, with even small shifts in interest rates continuing to shape buyer activity. The impact of interest rates isn’t uniform across the market, the more price-sensitive segments – particularly first-time buyers – tend to feel changes almost immediately, while the upper end of the market is generally less affected.
Global pressures keeping rates in check
While the decision to hold rates offers short-term stability, it also reflects the broader pressures facing the economy.
Stability is valuable in itself, It gives buyers a clearer picture of what their repayments will look like and allows them to plan with more confidence, even if rates haven’t started coming down yet.
Rising fuel prices, ongoing geopolitical tensions, and currency volatility continue to fuel inflation concerns, limiting the Reserve Bank’s room to introduce rate cuts in the near term.
As a result, global economic shifts are filtering through into the local lending environment. Changes in inflation, currency strength, and global interest rates all influence how banks assess risk and price home loans, ultimately affects both what buyers qualify for and the rates they’re offered.
Lending appetites remain healthy despite economic pressure. Buyers with a strong financial profile, good credit record and manageable debt are still able to secure favourable rates.
Budget 2026: Subtle shifts with real impact
While the interest rate decision sets the immediate tone, this year’s Budget Speech introduced a number of changes that could support property activity over the medium term.
More flexibility for homeowners
One of the most notable updates is the increase in the primary residence capital gains tax (CGT) exclusion, which has been raised from R2 million to R3 million. This is a meaningful adjustment for homeowners, It allows sellers to retain more of their profit when they sell, which can make it easier to upgrade, downscale, or reinvest in the market. Rather than triggering a sudden surge in listings, this change is expected to encourage more gradual movement, particularly in the mid- to upper-market segments.
What it really does is give homeowners more flexibility around timing, They’re able to make decisions based on their needs rather than being constrained by tax implications.
Stability supports confidence
Alongside this, the absence of any changes to transfer duty thresholds provides a sense of continuity for buyers.
In a market where affordability is already under pressure, policy stability is important, knowing what your upfront costs will be allows for better planning and more confident decision-making.
Other measures – including full inflation adjustments to personal income tax brackets – are expected to provide modest relief to households, potentially improving affordability at the margins.
For investors and developers, the decision to maintain the corporate tax rate at 27% supports a more predictable investment environment, while the increased VAT threshold for small businesses may ease pressure on smaller operators within the property ecosystem.
Long-term gains through infrastructure
Looking further ahead, government’s commitment to significant infrastructure investment is expected to play a role in shaping property demand over time. Large-scale infrastructure spending can support property values by improving accessibility and service delivery, however, the benefits are likely to be gradual and will vary significantly depending on location.
Proposed municipal reforms, which link funding to service delivery performance, could also help restore confidence in underperforming areas – although these changes are expected to take time to materialise.
Navigating the current market
For Buyers
For buyers, the combination of stabilising interest rates and improving sentiment presents opportunity – but careful planning remains essential. Rather than trying to perfectly time the market, Mott says the focus should remain on affordability, location, and long-term value.
Sustainable buying decisions are far more important than short-term timing. If you’ve accounted for potential rate changes and chosen a property with strong fundamentals, you’re in a much better position to ride out uncertainty.
From a financing perspective, preparation is also key. Buyers should take the time to properly assess their affordability and stress-test their repayments, understanding how your bond would perform under different rate scenarios helps ensure you don’t overextend yourself.
For Sellers
Sellers, meanwhile, are operating in a more competitive environment, where realistic pricing and strong presentation can make a significant difference. Positioning a property correctly from the outset – both in terms of pricing and condition – remains one of the most effective ways to attract serious buyers.
In today’s market, it’s important to balance value with realism, well-priced properties that are presented professionally are far more likely to attract strong interest and achieve successful outcomes.
For Homeowners
For existing homeowners, the current environment calls for a more proactive approach to managing finances.
Regularly reviewing budgets, maintaining a financial buffer, and avoiding unnecessary debt to help reduce risk – particularly while interest rates remain elevated.
Even in a stable rate environment, it’s important to be prepared, building in a financial buffer and keeping your debt manageable can make a big difference if conditions change.
A steady path forward
All things considered, most experts agree that the outlook for South Africa’s property market remains one of gradual improvement.
We expect a steady recovery over the next 6 to 12 months, with modest price growth and improving activity levels, but external risks – particularly those affecting inflation and fuel prices – will continue to influence how quickly that recovery gains momentum.
For now, the combination of rate stability, targeted tax relief, and improving sentiment is helping to lay the groundwork for a more balanced and resilient property market. One where informed, long-term decisions are likely to yield the strongest results.
A stable rate decision offers short-term relief, but ongoing global pressures continue to cloud the outlook for South Africa’s property market.
MPC's decision to keep interest rates unchanged with a repo rate at 6.75% and the prime lending rate at 10.25% comes as little surprise against the backdrop of global uncertainty.
Headline consumer inflation cooled to 3.0% in February from 3.5% in January, with the monthly Consumer Price Index (CPI) increase measured at just 0.4%, suggesting price pressures are moderating for now.
While a hold on interest rates offers some welcomed breathing room for consumers, the broader economic environment remains uncertain.
Global tensions, particularly those impacting oil supply, are likely to influence fuel and food prices locally, which could place upward pressure on inflation later in the year.
Despite interest rates remaining unchanged, Goslett explains that the property market continues to operate with caution. Buyers and sellers alike are navigating mixed signals, balancing improved affordability against concerns of future rate movements.
On the positive side, interest rates have eased back to levels comparable to the pre-COVID period (6.5% in October 2019). Thankfully, we are well below the peak of 8.25% seen in 2023.
While stability in rates is the best we can hope for now, that confidence will depend on clearer economic direction. For now, the unchanged rate supports transactional activity, but strained momentum will require greater certainty around inflation and future rate decisions.
Decision not to cut the interest rate was expected
The wait-and-see approach adopted by the Reserve Bank meeting was to be expected given the global turbulence since February due to conflict in the Middle East.
Concerns that an extremely high fuel increase and resultant increases in food and service prices will put pressure on household disposable incomes. But he views the rates remaining the same, at 6.75%, during what are particularly uncertain times, as a positive sign.
Prior to the current geopolitical tensions, most analysts expected interest rates to be cut by at least another 50 basis points during 2026. Abernathy expects the Reserve Bank to hold off on cuts until things begin to stabilise, with further cuts unlikely until late in the year at the earliest.
What we are unlikely to see is a repo rate increase as all are aware that we need to make it as easy as possible for South Africans to ride out this unfortunate period. As things stand, even at $100 per barrel, the high oil price is unlikely to put too much pressure on the Reserve Bank’s new 3% inflation target and its one-percentage-point tolerance band.
Like the Reserve Bank, the property market remains resilient. Buyers on the lookout for the right property, in the perfect location and at a good price, would continue to invest.
