HEIBERG ESTATES NEWSLETTER: MARCH 2026
Dear Property Partners
Who could have thought that in less than a month since our last correspondence, the world order has been thrown into turmoil, which is also not good news for our beloved country. This unexpected scenario, unfolding just as our economy – as well as our property market – has been picking up speed amidst the macroeconomic indicators pointing to moderate economic growth this year. Although our economic growth rate for 2025 was a mere 1.1%, it more than doubled the 0.5% recorded in 2024, whilst our SA property sector was one of the biggest contributors and drivers to this increased growth rate. The latest huge increase in fuel prices and upward pressure on our inflation rate, is expected to have a negative impact on local economic and household income growth, which in turn could increase risks for our credit-dependent residential market and financial institutions’ willingness to approve home loan applications.
It is with growing concern that everybody is monitoring the present volatile geopolitical developments and the crisis in the Middle East with a lot of broad-based economic and political uncertainties. We are all aware that geopolitical tensions can cripple economies, and our local fuel prices are dictated by international developments rather than by domestic policy, whilst fluctuations in global markets leave us very exposed as we are heavily dependent on imported refined fuel.
It is expected that our country will also face renewed political pressure where South Africa has been a strong ally of Iran for some time now, whilst also being an outspoken member of BRICS, which could contribute to renewed corporate risks and challenges for our fragile economy as a whole. Already, the well-performing rand against foreign currencies until the outbreak of the war has weakened against the US dollar but still showing resilience, where year-on-year it has appreciated by around 9%! This is largely due to gains in gold and platinum prices, which are key South African exports.
We are bracing for economic uphill battles if the shocking surge in oil prices continues, especially since our industries are so dependent on imported fuel (about 90%) and also how long these substantially elevated prices in gas and fuel, will remain. The present supply constraints for oil shipping with the effective closure of the Strait of Hormuz, directly impact the higher oil prices despite production increases and the recent release of oil reserves by the EU. Diesel supply and cost sensitivity, especially in our agriculture and transport sectors, which are very important parts of our economy, will be severely impacted if there is a prolonged increase in diesel prices, which in turn will have a knock-on effect throughout the broader economy. Also to take into account that Tourism is a huge contributor to our state coffers and the airspace closures will impact our tourism sector for some time to come. A prolonged high brent oil price period, will severely hamper any prospects of economic growth and with inflation rising inevitably, any hope of further cuts in the interest rate will be in vain and putting again noticeable pressure on our property market.
History has proven that our inflation is significantly affected by changes in exchange rates and international commodity prices, especially oil prices. Our stabilising inflation rate, which in February was recorded at 3% vs the 3.5% recorded in January, is unfortunately expected to increase due to the snowball effect of the war in the Middle East, potentially erasing government economic growth forecasts (that was expected to be around 1.6% for 2026) and positive fiscal plans that seemed so exciting for this year. As expected the SA Reserve Bank at their recent policy meeting held on 26th March, kept the repo rate unchanged at 6.75% with our prime lending rate remaining unchanged at 10.25%, due to the inflation risks expected to emanate from the Middle East conflict for some time to come. In spite of recent international credit rating upgrades, as referred to in our previous February Heiberg Estates Newsletter, further credit rating upgrades in the near term, also seem unlikely now.
Some of the latest interesting facts and statistics, as follows:
- Leading Economist John Loos, reports that although 2026 was set to be a stronger housing market year, the Middle East conflict poses a real risk. SA started the year with CPU inflation basically under control at 3.5% as recorded during January, and leading to all-around expectations that the SARB would lower the repo rate twice during the course of this year, in turn stimulating the economic growth rate and with an expected 6% average house price increase. All of this now in jeopardy due to the conflict and expected negative long-term effects on the worldwide economy and our own.
- The volatile situation coupled with fuel prices and a supply chain at risk, brings renewed challenges to our economy and the inflation rate with as mentioned negative impact on household income growth and affordability to invest in property, especially with the highly credit-dependent residential property market.
- Further interesting reports, are indicating that price growth of existing homes, is outpacing newly sold homes. Price increases for sectional title properties, are also narrowing the gap between sectional title- and full title property prices.
- Existing house prices increased year-on-year in average by 7.4% vs the 3.3% price increases recorded for new homes – this trend is expected to put downwards pressure on new developments, especially with increasing prices of building- and other materials with the present worldwide crisis and uncertainties.
- A recent released StatsSA’s House Price Index, showed further acceleration in national average year-on-year price growth as recorded in October 2025 to a rate of 6.8% versus the previous quarter’s 6.3%. A good strengthening trend from the 1.5% recorded in the late 2023, and well-above the CPI inflation rate.
- Like the past few years, it was again the Western Cape that outperformed the rest of the country and it was the biggest contributor to the overall house price growth rate. StatsSA attributes 3.5% percentage points of the 6.8% national house price growth rate, to this province.
Due to the war, the cost of petrol, diesel, food prices, and the daily cost of living is already on the increase. Will there be supply disruptions, and how serious will it have a ripple effect and feed through to broader inflation? What will happen beyond that for some time to come in our economy? A continued and spreading Middle East war, leading to a worldwide increase in inflation rates and possibly interest rates, will inevitably put huge downwards pressure on our rand exchange rate, our own economic growth and inflation rates. Should there be interest rate increases later this year, it will curb people’s affordability and interest to invest in our property market, especially in the lower price ranges.
Unfortunately, investors’ appetite to invest in property is expected to again move into a more static “wait-and-see” scenario. The heartwarming past 12-to-18 month period of house price increases and increased sale volumes, is expected to be put on hold again for the foreseeable future until there is more clarity of developing worldwide and local state of affairs.
Fortunately Pretoria’s real estate market, is always on the move with big anchors like government- and diplomatic institutions, excellent schools and colleges, the University of Pretoria and a huge range of corporates in and around our city, stimulating ongoing demand for good investment and rental properties. So please contact your Heiberg Estates Team for any property inquiries and needs, we could assist with. Our website:
Your continued support through good and challenging times, is deeply appreciated by your Heiberg Estates Team and we all thank you again!
Best and warm regards
Bambie & Heiberg Estates Team
