South African house price growth slows as the property market begins to stabilise

South African house price growth continued to moderate in July 2026, but constrained housing supply is helping to prevent a sharper decline in property values.

The latest FNB Property Barometer shows that annual house price growth slowed to 5.1% in July, down from 5.5% in June. This remains slightly ahead of consumer inflation, which measured 4.3% year-on-year during the month.

While the figures point to softer demand, emerging signs of stability suggest that the worst of the recent market correction may be over.

House price growth is losing momentum

The FNB House Price Index reached annual growth of 6.1% in March and April before easing to 5.8% in May, 5.5% in June and 5.1% in July. Average house price growth for the second quarter, covering April, May and June, was 5.8% year-on-year.

Although residential property prices are still growing faster than consumer inflation, the gap has narrowed considerably. This suggests that the strong price momentum seen earlier in the year is gradually normalising as affordability pressures and weaker confidence weigh on demand.

FNB expects house price growth to slow further towards 4% by the end of 2026, bringing property inflation closer to broader consumer inflation.

Demand remains under pressure, but conditions are stabilising

FNB’s market indicators show that demand improved marginally during July, while supply conditions remained broadly unchanged.

This pushed the Market Strength Index to 52.40. A reading of 50 indicates that supply and demand are balanced, while a figure above 50 suggests that demand continues to hold a slight advantage. However, demand remains well below its February 2026 peak. Higher living and borrowing costs, weaker consumer confidence and heightened global uncertainty have all contributed to more cautious buyer behaviour.

A sustained improvement will likely depend partly on when the interest-rate-cutting cycle resumes and whether lower borrowing costs begin to improve affordability.

Related reading

South Africa's house price growth slows as higher borrowing costs weigh on demand

See how South Africa's housing market performed in June 2026 as higher borrowing costs and weaker buyer demand began to slow house price growth.

Read the article →

Limited housing supply continues to support prices

One of the most important factors supporting the residential market is the limited availability of housing stock. New residential development activity remains subdued, while the number of existing homes available for sale has declined. This constrained supply is helping to offset weaker demand and reduce the risk of a more pronounced fall in house prices.

As a result, the market adjustment is more likely to appear through lower transaction volumes and longer selling periods in certain segments than through widespread nominal price declines.

Homes currently spend an average of 10 weeks and three days on the market. However, selling times can vary considerably depending on the suburb, property type, condition and asking price.

What the data means for buyers

Slower house price growth could give buyers more time to compare properties and make considered decisions, particularly in areas where listings are taking longer to sell.

However, constrained stock means buyers should not assume that weaker demand will automatically translate into substantial discounts. Well-priced homes in sought-after areas can still attract strong interest.

Before starting a property search, buyers should:

• Establish what they can comfortably afford
• Get pre-qualified for a home loan
• Research recent sales in their preferred area
• Consider the full cost of ownership, not only the purchase price
• Work with an agent who understands local market conditions

What the data means for sellers

The market remains supportive of modest price growth, but buyers are becoming increasingly value-conscious. Sellers should base their asking price on recent comparable sales and current local demand rather than national averages or expectations formed during stronger market conditions.

Properties that are priced realistically and presented well are more likely to attract serious buyers within a reasonable period. Overpricing can lead to an extended time on the market and may ultimately weaken the seller’s negotiating position.

Local conditions remain more important than national averages

The FNB House Price Index provides a useful view of broad market direction, but it does not determine what an individual property is worth.

Price growth can differ significantly between provinces, cities, suburbs and property categories. Local supply, buyer demand, security, schools, infrastructure and the condition of a home all influence its market value. Buyers and sellers should therefore use national data as context while relying on recent comparable sales and professional local advice when making property decisions.