The latest market reports - is the housing market turning a corner?

According to reports, after nearly three years of high interest rates, cautious buyers, and slow transaction volumes, the South African property market is finally entering a new phase. But more importantly, it’s not a boom.

According to the latest FNB Property Barometer (February 2026), the housing market is moving into what economists describe as a sustainable recovery cycle, driven by improving affordability rather than speculation.

For buyers, sellers, and homeowners, that distinction matters.

It is not a property bubble; it is a market recovery

The South African housing market enters 2026 at a cyclical turning point. Following the post-pandemic interest-rate hiking cycle, the market has shifted from one in which prices were supported mainly by limited supply to one in which buyer demand is gradually returning.

According to the Property Barometer, house price growth is a modest, but significant, 4.9% year-on-year. This signals stability in the market and not overheating. In fact, economists expect house price inflation to remain in a controlled range of roughly 3.5% to 4.5% during 2026, still slightly above inflation.

That means real property values should rise again after several flat years. The key difference compared to previous property cycles is that the market is not improving because of easy credit or investor speculation - it is driven by affordability.  

Interest rates are finally starting to help buyers again

One of the biggest shifts behind the recovery is the economic backdrop. In 2025, inflation averaged just around 3.2%, the lowest in over two decades, and it is expected to stay close to 3% in 2026.

Despite the hold on interest rates at the first Monetary Policy Committee meeting of the year, economists expect about 50 basis points of interest-rate cuts during 2026. It is important to remember that the decision made by the  SARB highlights its cautious stance amid rising global uncertainty. Geopolitical tensions, volatile commodity markets, and a guarded approach by major central banks, particularly the US Federal Reserve, all play a role in shaping local policy decisions. It is not that they don’t have confidence in the local market.

As affordability conditions continue to improve and real household incomes recover, it is expected that first-time buyers and upgrading families will drive the renewed market activity. 

Expect more sales before big price increases

The report also offers an important insight regarding price increases. 

Rather than an immediate price surge, we will first see a recovery in activity. This means that there will be more buyer enquiries, higher transaction volumes, and faster selling times. Only after this will prices accelerate. 

Currently, the average property takes about 11 weeks and four days to sell, which is already an improvement from the 15 weeks and 1 day high in some price segments recorded in Q4 of 2025. 

Estate agent sentiment has also strengthened significantly, signalling better selling conditions and rising buyer interest. If you are looking to buy soon, now would be the best time to act, and sellers should keep in mind that a correctly priced home will now sell faster than before. 

Why prices are unlikely to fall

Many potential buyers are still waiting for house prices to drop. The data suggests that it’s unlikely. The biggest reason is supply.

New residential construction remains well below long-term levels due to weak developer confidence and high building costs. In other words, South Africa simply is not building enough new homes.

This limits oversupply and effectively places a floor under property prices. As affordability improves, it is expected to translate into more sales rather than cheaper homes.

Which price ranges are performing best?

The market is not recovering evenly. Different price bands are behaving differently.

The strongest activity is currently in the upper-middle segment (R2.6m – R3.6m), which shows the highest confidence levels among buyers and sellers. The affordable segment below R750 000 is improving more slowly, as entry-level buyers remain sensitive to interest rates and credit conditions.

However, well-priced entry-level properties are still selling, often faster than expected, suggesting first-time buyer demand is returning gradually.

Regional trends: Western Cape still leads

Provincially, the Western Cape continues to outperform the rest of the country, with homes selling in an average of about 6.2 weeks, far quicker than the national average. Gauteng is showing steady recovery, while KwaZulu-Natal is seeing faster deal completion times as confidence slowly returns.

What this means for buyers and homeowners

The biggest takeaway right now is that South Africa is entering a stable housing recovery and, unlike past cycles, the improvement is based on improving affordability, stabilised household finances, lower inflation, and gradual interest-rate relief. The biggest takeaway from the 2026 outlook is this:

For buyers, waiting for a property crash could mean missing the most favourable conditions of the cycle. The period where interest rates are falling but prices have not yet accelerated.

For homeowners, the outlook is encouraging. The report suggests the market is moving from post-rate-hike stabilisation into a measured expansion phase, with steady activity and moderate price growth expected through the year.

In short, 2026 is unlikely to be the year of cheap property, but it may be the year of opportunity.