South Africa’s property market is poised for a period of relative stability and gradual growth following Finance Minister Enoch Godongwana’s announcements in the Medium Term Budget Policy Statement (MTBPS).
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That’s according to Berry Everitt, CEO of the Chas Everitt International Property Group, who says the combination of a lower inflation target, improved national debt dynamics, and new incentives for private sector infrastructure investment collectively signals a more predictable environment for buyers, investors, and developers.
“The Minister’s announcement of a new 3% inflation target, with a one-percentage-point tolerance band from 2% to 4%, represents a decisive step toward anchoring price stability and bringing South Africa in line with advanced economies,” Everitt explains. “Over time, lower inflation expectations are likely to pave the way for a sustained reduction in interest rates - even from their current relatively low levels.”
For the property market, he says, this could mean improved mortgage affordability, stronger household confidence, and a revival of investor appetite after several years of cost-of-living pressures and cautious lending conditions.
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Fiscal discipline was another key theme of the MTBPS. With national debt now projected to stabilise at 77.9% of GDP in the 2025/26 financial year and the primary budget surplus expected to grow to R224 billion by 2028/29, Everitt says the message was one of “consolidation and control.”
“This reversal of more than a decade of rising public debt reduces upward pressure on long-term lending rates, which supports property financing for both private buyers and developers,” he notes. “Lower debt-service costs also free up funds for government spending on infrastructure, health, education, and crime prevention - boosting investor confidence, stimulating job creation, and ultimately supporting homeownership.”
Equally important, says Everitt, is the government’s shift from consumption spending toward capital investment, which is expected to grow by an annual average of 7.5%.
“Infrastructure expansion - from energy transmission to water systems and rail corridors - will underpin regional development and improve the reliability of basic services that are essential for both residential and commercial property confidence,” he adds.
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Everitt highlights the forthcoming R15 billion Infrastructure Bond and the creation of a new Infrastructure Finance and Implementation Support Agency, expected by March next year, as key steps in attracting private capital and accelerating national development.
He also welcomes Treasury’s emphasis on improving municipal management and service delivery:
“The focus on professionalising local utilities, reforming municipal infrastructure grants, and partnering with entities like the Development Bank of SA and the Municipal Infrastructure Support Agency to stabilise struggling municipalities will have long-term benefits. Reliable water, electricity, and sanitation services are fundamental to property market performance in both smaller towns and major metros.”
Taken together, Everitt says, these measures signal “a more balanced, confidence-building environment for real estate.”
“Buyers are likely to experience improved affordability as borrowing costs decline gradually, while developers will benefit from reduced financing volatility and clearer infrastructure planning. Over the long term, these policies could help shift the South African property market from reactive and cyclical to one supported by steady, broad-based economic growth and stronger service delivery foundations.”
Broader economic implications
Dr Andrew Golding, Chief Executive of the Pam Golding Property Group, echoed a generally positive outlook, noting that the MTBPS struck an encouraging tone amid ongoing fiscal consolidation.
“Buoyed by commodity windfalls, stronger-than-expected tax revenue collection, tighter spending controls, and improved investor sentiment, the MTBPS reflected cautious optimism,” says Golding. “However, the February 2026 Budget will serve as the true litmus test of South Africa’s fiscal resolve.”
With revenue expected to outperform by an estimated R19.3 billion, Golding says South Africa may be able to avoid the previously signalled R20 billion tax increase in February 2026. “This would be welcome news for household finances and, by extension, the housing market - enhancing affordability, particularly for first-time home buyers,” he explains.
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Golding also supports the new inflation target of 3%, with a 1% tolerance band to be phased in over the next two years, saying it should support a sustained period of lower interest rates in the medium to longer term. “This will provide a further stimulus for aspiring homeowners as well as those seeking to relocate in line with evolving lifestyle needs,” he says.
He adds that the renewed emphasis on public-private partnerships to drive improvements in energy, water, and transport infrastructure is a critical step toward sustainable growth.
“Against this backdrop - and with two further 25bps repo rate cuts anticipated by mid-2026 - in an already rebounding residential property market, the outlook for the economy and the housing sector appears increasingly positive,” Golding concludes. “Improved consumer and buyer confidence, along with renewed activity, is expected to support steady growth across key market segments.”
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