South Africa’s property market is poised for a period of relative stability and gradual growth following the announcements in today’s Medium Term Budget Policy Statement (MTBPS) by Finance Minister Enoch Godongwana.
That’s the word from Berry Everitt, CEO of the Chas Everitt International property group, who says the confirmed shift to a lower inflation target of 3%, improved national debt dynamics and new incentives for private sector infrastructure investment collectively signal a more predictable environment for buyers, investors, and developers.
“The Minister’s announcement of a new 3% inflation target, with a one-percentage-point tolerance band from 2% to 4%, represents a decisive step toward anchoring price stability and bringing SA in line with advanced economies, and over time, lower inflation expectations are expected to pave the way for a sustained lowering of interest rates even from their current relatively low levels,” he says.
“For the real estate market, this would mean improved mortgage affordability and, we believe, stronger household confidence and revived investor appetite after several years of constraints placed on prospective buyers by cost-of-living pressures and cautious credit conditions.”
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Fiscal discipline was another key theme of the MTBPS and with the national debt now set to stabilise at 77,9% of GDP in the 2025/26 financial year and the primary budget surplus projected to grow to R224bn by 2028/29, the Minister’s message was a welcome one of consolidation and control, Everitt says.
“This reversal of more than a decade of rising public debt reduces upward pressure on long-term lending rates, which will support property financing for both private buyers and commercial developers. Lower national debt-service costs will also free up money for the government to spend on infrastructure, health, education and crime fighting, which will boost investor confidence and stimulate economic growth, job creation and ultimately, homeownership.”
Crucially, Everitt says, the shift by the State from consumption spending toward capital investment, which is set to grow at an annual average of 7,5%, also sets the stage for a more sustained property recovery. “Infrastructure expansion, from energy transmission to water systems and rail corridors, will underpin regional development and improve the reliability of basic services that are essential for both residential and commercial real estate confidence.
“The planned R15bn Infrastructure Bond to be launched soon and the creation of a new Infrastructure Finance and Implementation Support Agency by March next year are designed to crowd-in private capital, accelerating the pace and scale of development across the country.
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“In addition to this, reforms to municipal management and service delivery will have major long-term implications for property markets. The Treasury’s emphasis on professionalising local utilities, reforming municipal infrastructure grants and partnering with entities like the Development Bank of SA and the Municipal Infrastructure Support Agency to stabilise and recapacitate the country’s many struggling municipalities is set to improve reliability of water, electricity, and sanitation provision, the fundamental services that have the most influence on property market performances in both smaller towns and major metros.”
Taken together, he says, the new inflation target, improved fiscal outlook and rapidly increasing private sector participation in the infrastructure sector suggest a more balanced, confidence-building environment for real estate.
“Buyers are likely to experience improved affordability as borrowing costs decline gradually, while developers stand to benefit from reduced financing volatility and clearer infrastructure planning. And in the longer term, these policies could help shift the SA property market from reactive and cyclical to one supported by steady, broad-based economic growth and improved service delivery foundations.”
