Although the Reserve Bank decided this week to adopt a cautious approach and keep interest rates as they are until there is more certainty around the conflict in the Middle East and oil prices, there is still reason for optimism in SA’s real estate market.
That’s the view of Stephen Whitcombe, MD of leading Johannesburg property group FIRZT Realty, who says it is important to remember that interest rates are currently 1,5 percentage points lower than at this time last year, and that consumer inflation slowed to a multi-year low of 3,0% in February 2026 - precisely in line with the Reserve Bank’s new target.
“In addition, salaries are expected to rise by between 5% and 6% this year, which at this stage still indicates real-term growth and a genuine improvement in affordability.”
However, he says, property sellers should definitely not read this situation as an invitation to raise their asking prices. Instead, they should focus on the fact that demand continues to strengthen – and on the opportunity this creates to secure a swift, successful sale by offering compelling value.
“The past few years have taught consumers painful lessons about over‑extending themselves during periods of low interest rates and prospective buyers are now far more disciplined, focusing on what they can comfortably afford over the long term rather than stretching to meet inflated asking prices.”
Sellers should take into account the fact that many consumers are still carrying high debt loads, with estimates indicating that households continue to spend around 50% of disposable income on debt repayments, says Whitcombe.
“The overall cost of living is also much higher than it was five years ago. According to the Competition Commission’s most recent Cost of Living Report, electricity prices are 68% higher, water tariffs are 50% up, transport costs are 35% higher even without next month’s expected fuel price increases, education costs are 42% higher and health costs have increased by at least 33%.
“All of this limits the ability of buyers to absorb higher housing prices, even though they are more inclined to buy now, as clearly indicated by the rising number of home loan applications and the latest Absa Homeowner Sentiment Index, which shows that overall confidence in the market has risen to 87%, the highest level recorded in several years.
“Key demand indicators include the fact that 77% of potential buyers believe now is a good time to buy, up from 73% a year ago and that the proportion of renters wanting to buy now has risen from 69% to 77%, with many stating that they have now saved enough for a deposit after several years. In addition, buy‑to‑let investor sentiment now stands at 85%.”
In the field, he says, it is clear that demand is higher now and that there are far more active buyers in the market than there were 12 months ago. “But the fact is that most are still cautious and very value conscious – and that there is still ample inventory for them to choose from in most areas.
“Consequently, pricing discipline is now the critical factor separating homes that sell quickly from those that linger, and our advice to sellers is clear: price conservatively and focus on offering the best value for money in your immediate area. That approach will attract maximum buyer attention and significantly increase the likelihood of a swift, successful sale.”
