The punishing decade: what South African homeowners outside key areas experienced

The past decade has been punishing for most South Africans living outside a handful of high-performing residential nodes.  

In real terms, many homeowners have watched their properties lose value after inflation, while rates climbed, services deteriorated, and household balance sheets tightened, says Reinier van Loggerenberg, CEO, Craft Homes.

“That experience has understandably shaped buyer behaviour.”

The residential developer says that beneath the caution lies a fundamental resilience as South Africans have an enduring demand for better homes and a deep-seated desire to improve their lives, no matter the ups and downs.

It says homebuyers always find a way to move forward. 

“The latest Absa Homeowner Sentiment Index (Q4 2025) captures this spirit well: overall consumer confidence in the property market hit 87%, the joint-highest level on record, with property still seen as a secure, value-creating asset that builds long-term wealth and stability.” 

The economy changes for the better for housing

Over the past 18 months, the economic environment has begun to stabilise in ways that matter for housing, Van Loggerenberg says. 

The CEO says interest rates have eased meaningfully from their peak (with the repo rate holding at 6.75% and prime at 10.25% as of early 2026, following cuts in 2025). “Inflation expectations are narrowing. Credit conditions, while still tight, are no longer deteriorating. Domestic policy direction, though slow, is less erratic than it has been in years.” 

This is not a boom cycle, says the developer. It adds that this is the first time in a long while that the fundamentals are pointing in the same direction.

Buyer affordability improving

For buyers, affordability is starting to improve, says Craft Homes. It adds that lower borrowing costs translate directly into higher approval odds and better monthly cash-flow outcomes.

“At the same time, real wage growth, though modest, is no longer consistently negative. For many households, that combination is the difference between perpetual postponement and a cautious re-entry into the market.” 

The Absa data reflects this: 66% of respondents see the current market as a buyer's market, with properties viewed as reasonably priced, and buying sentiment is strong at 77% (up quarter-on-quarter).

Younger South Africans under 44 are particularly optimistic (89% confidence) and drove half of recent purchases, while inland areas show notably higher enthusiasm than coastal ones across most measures.

“We are seeing this reflected in buyer behaviour,” says Van Loggerenberg. “Demand is recovering, but it is disciplined. Purchasers are doing their homework. Security, reliable infrastructure, location and long-term running costs now outweigh speculative upside.

"Buyers are looking for certainty and value that holds; preferences that align with the report's emphasis on ownership over renting for financial and lifestyle benefits.”

Homes must work for today’s financial realities

In this kind of market, Craft Homes says success depends on choosing the right nodes, designing for real end-users, and delivering homes that work within today’s financial realities.

It says this means smaller, more efficient units. “Mixed-use precincts that reduce transport costs. Developments located close to employment centres, lifestyle amenities and public infrastructure. These are responses to how South Africans are living and spending now, trends like co-living (36% of homeowners sharing with family to cut costs) and a focus on practical, resilient features.” 

Craft Homes adds that it is also seeing the return of long-term thinking from investors. It adds that rental demand remains strong in well-located urban nodes, particularly where developments offer security, energy resilience and professional management.

Investors are not expecting outsized capital gains in the short term, but they are increasingly comfortable with steady yields in a stabilising environment, as echoed in the Absa HSI's investing sentiment at a near-record 85%.

Just after the 2026 State of the Nation (Sona) address delivered by President Cyril Ramaphosa last week, ahead of the National Budget to be delivered by Finance Minister Enoch Godongwana next week, the developer says the housing sector needs execution: faster planning approvals, predictable zoning decisions, reliable bulk infrastructure, and functional municipal services.

“These are practical enablers of private investment. Residential development is one of the fastest ways to convert policy certainty into economic activity, creating construction jobs, professional services, supply chains and long-term community growth.

"But when approvals stall, when service connections are uncertain, or when regulatory processes are opaque, projects pause.”

Risks are not gone altogether

Importantly, improved sentiment does not mean risk has disappeared, says Van Loggerenberg. 

“Credit stress remains elevated, municipal performance is uneven, and affordability constraints are still real for many households. The recovery, such as it is, is fragile. That is why reckless optimism would be misplaced. But pessimism is no longer accurate either.” 

"Independent Media Property" recently reported that on average, a local consumer has about seven loan agreements to their name.  

This includes everything from vehicle purchases to personal loans and credit cards used to pay deposits or manage day-to-day expenses, says Bongani Gwexe, the supervisor industry analyst for Statistics at the National Credit Regulator (NCR). 

South Africa’s residential market is beginning to reflect an economy that is slowly repairing itself, says Craft Homes. “Not dramatically. Not evenly. But measurably. For the first time in years, buyers, sellers, lenders and developers are operating within a framework that feels less volatile and more navigable.” 

Prospects

It says that as the country looks to the year ahead, the opportunity is to protect and extend this fragile stability.

“If the government picks up the pace themselves on faster delivery, approvals, infrastructure and services, then the private sector and the people can just keep on as we have for the last decade by investing, building, innovating and pushing ahead.

"With strong underlying resilience and disciplined demand already in play, housing will accelerate as the cornerstone of household wealth and urban regeneration. Let's get going properly, together.” 

Property markets naturally move in cycles. There are several proactive steps homeowners can take right now to protect and even enhance their property’s long-term value, says Adrian Goslett, CEO and regional director of REMAX Southern Africa.

He says property value protection starts with understanding that real estate is both a financial investment and a lifestyle asset.

“Even in times of economic uncertainty, well-maintained and strategically improved properties continue to attract strong buyer interest. Homeowners who take a proactive approach place themselves in a better position when it comes time to sell,” says Goslett.

Independent Media Property