South Africa’s house price growth strengthens, but a slower finish to 2026 may lie ahead

South African house prices continued to rise in May, but signs of slowing momentum suggest the market could lose some pace towards the end of 2026.

In his commentary published on 8 October, independent economist John Loos notes that Stats SA’s house price indices showed national annual growth of 8.2% in May 2026, up slightly from 8.08% in April. While this extends the recovery in price growth seen since late 2023, the pace of improvement is becoming smaller.

For buyers and sellers, the picture is one of continued price growth alongside mounting affordability pressure. Regional differences remain substantial, while higher inflation and interest rates could weigh on demand during the remaining months of the year.

House prices are rising, but momentum is easing

National annual house price growth has strengthened considerably from around 1.5% in late 2023. However, Loos points to signs that the growth rate may be approaching a peak.

Monthly price growth has remained below the multi-year high of 0.82% recorded in November 2025 for six consecutive months. Although monthly figures are more volatile than annual measures, this supports his view that the market’s momentum is easing.

Slower growth would not necessarily mean falling house prices. It would mean that prices continue to increase at a more modest rate, with conditions varying between locations and property segments.

Inflation is reducing the value of price gains

House price growth remained ahead of consumer inflation in May, but the gap between the two narrowed.

After adjusting for inflation, annual house price growth measured 3.61% in May, down from 4.98% in February. Over the same period, consumer inflation increased from 3% to 4.5%.

This distinction matters for homeowners. An increase in a property’s rand value does not show how much its value has grown relative to the cost of other goods and services.

The longer-term figures illustrate this clearly. Between January 2010 and May 2026, the national house price index increased by 119.2% in nominal terms. After inflation, however, it was approximately 0.3% below its January 2010 level.

That national average also conceals considerable differences between provinces.

The Western Cape continues to shape the national picture