Despite headwinds, there are additional support factors that could continue to underpin the residential property market.
Image: Chumani Mazwi
There were several supportive tailwinds in the South African residential property sector, which continues to show signs of cyclical recovery.
According to the latest FNB Residential Property Barometer report, the initial upswing that began with first-time buyers in 2021 was soon bolstered by repeat buyers, and now the most recent phase is being driven by higher-income households reaping the benefits of positive wealth effects.
“Originally, we anticipated that this demand would gradually expand across the household sector, provided financial conditions remained favourable.
"However, this momentum is now being challenged by shifting global risks, especially the ongoing conflict in the Middle East, which has led to tighter financial conditions,” says Koketso Mano, FNB senior economist.
Despite these headwinds, there are additional support factors that could continue to underpin the residential property market.
The economist says in their report that they review a variety of cyclical and structural indicators to better understand why this recovery may persist, though perhaps at a more moderate pace, and how longer-term anchors could help establish a solid foundation for sustained improvement in market outcomes.
She says some key points include the market’s entry into this period with a relatively strong position, ongoing demand bolstered by improved confidence among foreign participants and higher-income households, as well as possible real wage growth in select sectors and innovative funding methods that could encourage broader home ownership.
“At the same time, a gradual recovery in supply and the continuation of structural reforms will play a crucial role in anchoring the long-term outlook."
“In summary, while we expect the property market’s performance to continue improving in the longer term, its near-term strength will increasingly hinge on the direction of inflation and interest rates,” says Mano.
Meanwhile, South Africa’s property market in 2026 is said to remain competitive, with limited stock in high-demand suburbs, rising property prices, and affordability pressures shaping buyer and seller behaviour.
In an article published on its website, MyProperty explored how buyers can adjust expectations, prepare financially, and navigate fast-moving markets, while sellers learn why strategic pricing, realistic expectations, and strong property presentation remain essential for achieving successful sales outcomes in today’s evolving real estate market.
The real estate company says buyers should understand their affordability, prepare financially and stay flexible on non-essential features.
It says sellers should avoid assuming that low stock automatically justifies overpricing.
“Well-priced, well-presented homes tend to attract stronger interest from serious buyers. Realistic expectations on both sides can help reduce delays, frustration, and missed opportunities.
"South Africa’s property market in 2026 remains active, but it is also becoming more nuanced. While house prices continue to rise in many areas, properties are taking longer to sell, buyers are becoming more selective, and affordability pressures continue to shape decision-making.”
In some suburbs, it says limited stock is still driving strong competition among buyers. In others, it adds that rising prices and cost-of-living pressures are creating a more cautious market where both buyers and sellers need to approach transactions with realistic expectations.
For both sides of the transaction, understanding current market conditions has become essential.
One of the biggest misconceptions in today’s property market is that all areas are experiencing the same conditions, says MyProperty.
In reality, it says South Africa’s market has become increasingly hyper-local.
“Some high-demand suburbs and lifestyle estates continue to experience stock shortages and strong buyer demand, while other areas are seeing slower activity and more price sensitivity. This means buyers and sellers need to understand the specific dynamics of their target area rather than relying on broader national headlines.”
Well-priced homes in desirable areas can still attract strong interest relatively quickly, particularly in secure estates, sectional title developments, family-focused suburbs, lifestyle-driven coastal nodes and well-located urban areas close to economic hubs.
At the same time, the company says homes that are overpriced or poorly positioned in the market often sit on the market longer than during earlier recovery phases. Current data shows that homes are taking nearly 12 weeks to sell on average, reinforcing the fact that buyers are becoming more deliberate in their decisions, it says.
While demand remains active, affordability pressures are changing buyer behaviour.
Today’s buyers are looking beyond the purchase price alone and evaluating the full cost of ownership, the company says. It adds that municipal rates, levies, transport costs, back-up power requirements, security, and maintenance expenses are all playing a larger role in purchasing decisions.
This shift is influencing what buyers prioritise, it says.
Increasingly, buyers are focusing on practical layouts, move-in-ready homes, energy efficiency, lifestyle convenience, reliable infrastructure, proximity to schools or workplaces and long-term affordability.
In competitive markets, buyers may also need to compromise on certain “nice-to-have” features while remaining focused on their long-term priorities.
The reality is that limited stock in popular areas may mean buyers cannot secure every item on their wish list within budget. Flexibility has become an important advantage in today’s market.
The company says that the recovery is still active, but becoming more balanced.
It says that while South Africa’s property market continues to show resilience, signs suggest that the pace of recovery is stabilising rather than accelerating. “House prices are still outperforming inflation, but buyers are becoming more cautious, and transaction timelines are lengthening.
This does not necessarily indicate a weak market. Instead, it reflects a more balanced environment where buyers are more informed, affordability matters more, pricing strategy is critical and realistic expectations drive better outcomes.
Ultimately, MyProperty says competitive markets tend to reward those who approach property decisions with realistic expectations, transparency, and a clear understanding of current conditions.
Independent Media Property