February 18 2026 14:00
Renier van Loggerenberg, CEO, Craft Homes, picture supplied
JOHANNESBURG, SOUTH AFRICA
As South Africa heads into another national budget cycle, much of the public conversation will focus on ambition, growth targets, reform pledges and infrastructure commitments. These all matter, but in residential property, confidence is built slowly. From where we sit as a residential developer, 2026 is shaping up to be less about dramatic recovery and more about predictability, Craft Homes says.
For most South Africans outside a handful of high-performing nodes, the past decade has been punishing. In real terms, many homeowners have watched their properties lose value after inflation, while rates climbed, services deteriorated and household balance sheets tightened. That experience has understandably shaped buyer behaviour.
Nevertheless, Craft Homes says that beneath the caution lies a fundamental resilience: “South Africans have an enduring demand for better homes and a deep-seated desire to improve our lives, no matter the ups and downs”.
The latest Absa Homeowner Sentiment Index (Q4 2025) showed that 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.
Over the past 18 months, the economic environment has begun to stabilise in ways that matter for housing. 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. But it is the first time in a long while that the fundamentals are pointing in the same direction.
For buyers, affordability is starting to improve. 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 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.
This is reflected in buyer behaviour. 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.
The implications for developers
In this market, success depends on choosing the right nodes, designing for real end-users, and delivering homes that work within today’s financial realities. 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.
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, echoed in the Absa HSI’s investing sentiment at a near-record 85%.
Ahead of the Budget, 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. Unfortunately the city of Johannesburg is incredibly slow with approving zoning.
Another notable shift is in seller behaviour. While some sales are still driven by financial pressure or relocation, a growing portion of transactions are lifestyle-motivated. Downscaling, simplifying and relocating closer to work or family are becoming dominant themes. This reinforces the importance of offering diverse housing typologies rather than one-size-fits-all solutions.
Importantly, improved sentiment does not mean risk has disappeared. 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.
247@propertyflash.co.za
