HEIBERG ESTATES NEWSLETTER: JAN 2026

Dear Property Partners

It is expected that the good and positive news that the SA Property Market ended 2025 with is likely to keep its positive momentum into 2026. Especially with the renewed investor confidence that we have observed so far in January. The increasing demand and corresponding rise in sales recorded throughout all property sectors over the past few months should be continued. Factors contributing to this optimism are continued lower interest rates with possible further cuts later this year, improving state finances, the removal from the FATF grey list, a S&P credit rating upgrade to BB, the 3% lower inflation target with our inflation coming more in line with other developed markets, soaring commodity prices especially the gold price, a stable rand exchange rate where the rand had a strong 2025 and last week even dipped below R16 per Dollar (the first time since June 2022), success in containing inflation and soaring metal prices where the gold price set new records at more than 5 500 US Dollar per ounce.

Not to let out of sight that improved governance under the Government of National Unity has also lifted sentiment and confidence in the reform agenda. The SA Reserve Bank is expecting our country’s economic growth rate to improve to 1.4%, which is a slight increase from the 1.2% recorded last year. According to the International Monetary Fund, the USA’s economy is projected to grow by 2.1%, China by 4.2%, and Europe is forecasted at 1.1%.  All of these factors are expected to contribute to increasing property investor confidence and interest not only locally, but also internationally.

Are we going to see more interest rate cuts as the SA Reserve Bank decided yesterday to keep the repo rate at 6.75%, meaning that the prime rates hold steady at 10.25%? At this stage, it seems to be likely by the end of this quarter, whilst for the rest of the year, only time will learn due to so many worldwide uncertainties on both political and economic fronts and with the volatile global markets, reacting in sync. With our small economy looking at the world stage, it is often challenged by international events and geopolitical shocks. We all acknowledge that local economic fundamentals need to be improved in order to create sustainable growth and job opportunities, but also investment trust and confidence.  Our inflation rate in December year-on-year was 3.6%, slightly up from the 3.5% recorded in November 2025. But also to take note that the overall inflation rate for 2025 was recorded at  3.2%, which is the lowest level in 21 years! Once our inflation rate moves closer to the 3% target band, the Reserve Bank is expected to continue with another series of .25 interest rate cuts.

There is noteworthy reverse semigration back from the coast to Pretoria and Johannesburg, where Gauteng is our country’s economic engine and primary job market, offering better-paid job opportunities, as well as good schools and universities, good property opportunities, and where the continued rising costs of properties and daily living costs in the coastal areas are driving people back.

The rental market is also expected to excel and remain strong this year, driven by urbanisation, semigration, and ongoing stock shortages, which will support investor interest. Price increases are inevitable as stock is in low supply, especially in those areas close to schools, universities, and shopping malls, serviced by good road infrastructure and public transport services. Already noticeable price increases have been noted over the past two months, and there is a shortage of residential rental properties across the board and in all price sectors.

Some of the latest interesting facts and statistics, as follows:

• The construction industry, as pointed out by the latest Afrimat Construction Index and one of the biggest providers of jobs, has been growing constantly over the past few quarters – a good sign for the sale of construction materials, job creation, as well as for the real estate industry as a whole. Especially since there is a shortage of stock noted in most sectors. With the series of interest rate cuts as well as hope for further cuts during the course of this year, it will further boost our construction industry.
• First-time buyers are still prominent and accounted for 17.4% of successful loan applications year-on-year, versus the 3.3% recorded between 2023 and 2024. Banks are increasingly supporting first-time buyers, and lower deposit requirements and reduced borrowing costs will support continuous movement and first-time buyers demand this year. The average price amongst first-time Buyers is recorded at around R1.27million.
• Female property buyers have emerged as leading players over the past decade, accounting for almost 60% of ownership, whether independently or jointly. Female first-time buyers outnumber first-time male buyers with 53% recorded last year versus the 46.3% recorded in 2015.
• Demand in most residential property sectors continues to exceed supply, which is good for Sellers and which will support rising property prices for the time being and in turn could lead to more properties coming unto the market to be sold.
• Interesting to note is the increased interest of foreign property buyers and investors, including returning SA expats in property in South Africa, with especially growing interest in Pretoria properties. Foreign investment gives huge impetus to our local property market, and looking at 2025, around 30% of Heiberg Estates sales were to high-net-worth overseas buyers. Our recently introduced lower 3% inflation target also helps to stabilise our rand exchange rate and to attract foreign investment in acquiring residential properties across all sectors and price bands.
• Also good for our property markets, is that the RMB/BER Business Confidence Index, rose by 5 points to 44% during last quarter of 2025, putting confidence in our economy three points above the long-term average and this increasing confidence was broad based – the 44% recorded, the highest level since 2022 and especially important for job creation in our economy – increasing people’s ability to buy property.
• Banks are supportive of bond applications, and the average national concession relative to the prime rate narrowed to -0.63% in October 2025. Over the past three months, the overall approval rate rose to 84.2%. Applications through ooba for 100% bond approvals increased to 55.6% as recorded in October 2025, but it was still well below the mid-2020 peak of 67.5% of total applications.
• On the Commercial Front, we hope that we can further improve in every sector this year, as was the status quo recorded during 2025, and where lower interest rates as well as a strengthening economic growth rate, created more confidence and movement in the industrial-, retail- and office markets.
• A recent FNB Report points out that industrial properties came out tops again in terms of sales activity with low vacancy rates and superior returns relative to the other two commercial sectors, especially since the driving force was the shift in warehousing and logistics requirements, stimulated by growing online retail.
• Interesting to note that the Office Market, which has been the black sheep for so many years, has noticeably picked up pace to become the second best performer amongst Commercial Properties, and is overtaking Retail Property. Residential conversions and mixed-use conversions of office space, which reduced office oversupply and vacancies, were a huge contributor.to overall and increasing investor demand in this property class. In the last quarter of 2025, an estimated 21.7%c of total office sales were due to the intentions of investors to convert office space to residential or mixed-use property, and just in Johannesburg, this figure was estimated to be 41%!
• The average house price growth outpaced inflation in 2025 and the national average purchase price increased by 3.6% during 2025 as recorded by ooba.

In summary:

Although at this stage and based on positive overall economic factors, we are all hoping for more than one further interest rate cut for the next six months, the worldwide economy is prone to uncertain times. There are geopolitical concerns around the USA/Europe/RSA trade relations and wars raging in the Middle East and elsewhere, which will have an impact on the way ahead and whether the SA Reserve Bank will announce further interest rate cuts. But on the other hand, soaring, record prices of gold and platinum have improved our country’s terms of trade, especially with the strengthening of the Rand against many foreign currencies.

With inflation moving closer to its 3% target, the hopeful sustained easing interest rate cut cycle will create impetus for people to invest in property. We are also happy that Sellers have become more realistic on pricing, creating a better balance and closing the gap between Seller and Buyer expectations. Confidence is returning, and general sentiment towards property as a proven and stable long-term investment is acknowledged in all property sectors, whilst this can further contribute and support sustained economic growth this year. Our Government’s reforms in key sectors are gaining momentum, and together with the private sector playing an increasingly larger role in the transport, electricity, and logistics sectors, there is for sure an exciting year ahead of us for sustained economic growth and unlocking much-needed sustainable job opportunities.

With so many positive macroeconomic indicators boosting market confidence and improved property investor sentiment, we are looking forward with much expectation to see a much-improved property market this year with increased prices and sales volumes across the board. Please call your Heiberg Estates Property Partners without hesitation, as our Heiberg Estates Team remains on 24/7 standby to assist and to respond to your requirements to the best of our collective more than 50 years of property market experience!

PLEASE LET US KNOW IF YOU ARE AWARE OF ANYBODY WANTING TO SELL OR HAVE A FREE PROPERTY ASSESSMENT!

With best and warm regards

Your Heiberg Estates Team