South Africa’s housing market slows as limited supply keeps prices supported

South Africa’s housing market continued to record price growth in the third quarter of 2026, but the pace is easing as affordability limits what buyers can spend.

According to FNB’s latest Property Barometer, annual house-price growth averaged 5.1% in the third quarter, down from 5.9% in the second quarter. By September, annual growth had slowed to 4.7%, while prices increased by just 0.02% compared with August.

For buyers and sellers, the figures point to a market where local conditions matter increasingly. Limited stock is helping to support prices in some areas, even as borrowing costs and pressure on household budgets constrain demand.

House prices are rising more slowly

The slowdown became more noticeable as the quarter progressed. Annual house-price growth eased from 5.4% in July to 5.1% in August and 4.7% in September.

This means prices are still increasing nationally, but the earlier momentum has faded. FNB expects annual growth to ease towards the mid-4% range in the near term.

The bank’s base case remains slower price growth and constrained transaction volumes, rather than a broad national decline in nominal house prices.

For prospective buyers, slower growth may provide more time to assess options and compare properties. However, it does not automatically mean sellers will accept substantial discounts, particularly in neighbourhoods where suitable homes are scarce.

For sellers, the practical implication is to price against current competing listings and recent comparable sales. A national increase in property values does not mean every home or suburb will achieve the same growth.

Limited housing supply continues to support values

FNB’s Market Strength Index reached 53.0 in September, above the 50 level that represents a balance between supply and demand.

The report attributes price resilience largely to limited supply. A reduced flow of listings and new housing stock has narrowed buyers’ choices in parts of the market, helping sellers maintain pricing power.

Where homes are scarce, marketing periods can be shorter and the discount needed to secure a sale more contained. The report does not, however, provide a national time-on-market figure.

This helps explain why affordability pressure and rising prices can exist at the same time: fewer buyers may be able to transact, but those who can may still be competing for a limited selection of homes.