Five residential property trends for 2026

Investors would do well to keep these on their radar

- GRANT SMEE

AFTER BATTLING against affordability challenges and sluggish sales activity in 2024, South Africa’s residential property industry defied the doom-and-gloom forecasts for 2025, staging a steady recovery fuelled by long-awaited interest rate cuts.

We ended 2025 with the prime lending rate a full percentage point lower than January—now at 10.25%—and with economists expecting two further 25-basis-point cuts by mid-2026, the outlook is looking bright for would-be property investors.

While ongoing diplomatic tension between the US and South Africa had a detrimental effect on the strength of the rand—particularly after the implementation of tariffs in August—like the residential property market, it has only come back stronger, rebounding by 13% over the course of the year.

The rand’s recovery has been aided by a revised lower inflation target—a move that over time will increase consumer spending power, and enable more buyers to enter the property market.

And so, with the stage set for economic and industry growth, here are the five major trends that are likely to dominate the local residential property market in 2026:

1. House price inflation set to stabilise

House price inflation skyrocketed in 2025—outpacing consumer inflation for the first time since the pandemic, and enabling property owners to realise real-value appreciation on their assets.

However, with this upward trend seen as a ‘turning point’ in aiding the residential property industry's recovery, homeowners are cautioned to keep their expectations more modest for 2026.

The majority of forecasts are predicting that growth will moderate in the new year, reflecting the normalisation of the market in the post-rate-cut rebound surge seen in 2025.