HEIBERG ESTATES NEWSLETTER: SEPTEMBER 2026

Dear Property Partners

About a week ago, the SA Reserve Bank (SARB) increased the repo rate by 25 basis points to 7.25%, increasing the prime lending rate to 10.75%, with more hikes that could be expected in the face of growing inflationary concerns, further driven by several global conflicts and petroleum logistics challenges. It is inevitable that it will dampen prospective buyers’ interest,  and lessen confidence to invest in properties as our prime lending rate now is the highest since May 2025. Looking at the total picture and being realistic, lessening affordability and stricter lending conditions from our financial institutions are putting pressure on our property market due to declining affordability, while sale volumes are once again on the decline, also due to declining stock supplies. Sustainable property growth in price and sale volumes, flourish in a stable and growing economy, controlled inflation and with increased buyers confidence – these are all being increasingly challenged at this point in time.

Our second-quarter GDP figure, recently released, also indicated a disappointing -0.2% quarter-on-quarter decline versus first-quarter growth of 0.5%, clearly illustrating the second-round effects of the rising fuel price and its impact on our inflation rate. Before the onset of the Middle East conflict in February, the imported cost of a barrel of oil was around R1 000, and we are now heading towards R1 900 per barrel! The SARB increased its average initial 2026 inflation forecast from 4% to 4.4% and for next year from 3.8% to 4%.

South Africa is amongst the countries hardest hit by the energy crisis, where it is estimated that we have had to pay R53.6 billion more for imported fuel since the Middle East war started in February 2026 – and the multiplier cost effects are evident across all sectors of our economy, especially in the agriculture, food, and transport industries. Many countries, due to rising inflation, have increased their interest rates as well. The American Federal Reserve for the first time in 3 years, increased its rate by 0.25% to 4%, the European Central Bank also announced an increase, whilst Japan recently increased its interest rate to 1.25% that is now the highest there over the past 31 years. There is widespread concern that the increase of worldwide fuel supply, could become an issue as global economies are energy- intensive, and economists predict that this could eventually if continued, lead to a recession.

The ongoing increases in fuel prices are noticeably having an impact on global inflation, with second-round effects throughout all sectors of the economy. Looking at our own country, inflation was 5% in June, 4.3% in July, and 4.4% recorded in August, remaining beyond the SARB’s ideal 3% inflation target band. With increasing inflation, the cost of capital is increasing, placing limitations on prospective property buyers wanting to buy property, especially first-time buyers. At this stage, and with the Middle East uncertainties and prolonged war, economists following the SARB, are predicting an inflation rate of around 4.4% – way up from the not too long ago 3.6% prediction. There is a resurgence in global oil prices in the face of supply risks related to restrictions on shipping along several sea routes in the Middle East. Lately, oil prices have steadily increased to around USD 108/barrel versus the USD 71/barrel recorded at the beginning of July. Another huge fuel-price increase is expected in October, and it is expected that this could push our CPI inflation to 5% by the end of the year.

Furthermore, our Rand also took a knock, where it recently deteriorated to R16.35 against the US Dollar. However, with one of the most sophisticated financial sectors in the world, structural reforms gaining momentum and credit-rating upgrades from S&P and Fitch over the past year, the Rand is still overall making its back straight and holding its own amongst so many headwinds, whilst being supported by improved investor confidence in South Africa and the rise in gold and platinum prices.

Another huge challenge for our SA Property Market is our high and growing unemployment rate. Well-known economist Dr Roelof Botha reports that between 2021 and 2024, around 188 000 formal employment opportunities were introduced into our economy, but this has taken a rapid downward curve, with a recent Altron FinTech report stating that between the last quarter of 2025 and the first quarter of 2026, around 190 000 people lost their jobs. Declining loan applications in al property price sectors, but especially in the lower price ranges, are being noted at financial institutions. The external economic environment is not expected to improve before the end of the year, and affordability when buying properties will become all the more challenging.

A global economic slowdown is predicted, with the International Monetary Fund now forecasting a global economic growth rate of 3% for this year, in comparison to the 3.5% recorded in 2025. There will be a negative impact on our own economy, where foreign demand for a wide variety of exports could be diminished, more jobs could be lost, and affordability and the ability to invest in property could be diminished across all property sectors.

Some of the latest interesting facts and statistics:

• The FNB Home Price Index records that house price growth year-on-year in July declined to 5.3%, versus the same 12-month period recorded in June at 5.5%, and recorded at 4.9% in August – illustrating lessening demand and constrained stock levels. But at least it is still more than the CPI that was recorded at 4.3% y/y in July. Nominal house price increases are expected to moderate towards the 4.5% range for the remainder of this year.
• Our agents at Heiberg Estates have for the past few months, experienced stock shortages, which are also being reported across a broad and nationwide front. This limited availability, especially in the lower to medium price ranges, offsets weaker demand conditions and buffers more radical property price decreases.
• The average time that a property is on the market before being sold, has declined to ten weeks and one day, the fastest selling period recorded since 2022, whilst only 53% of homes remain listed for three months or longer – once again indicating that Sellers should not have unrealistic expectations and should price their properties market-related and realistically, as Buyers have access to sale records and statistics and are increasingly buying by comparison to find the best value for their money.
• The FNB Property Barometer reports that in the R1.6m to R2.6m price range, it took an average of 10 weeks and 1 day to sell, and on average 85% of these homes sold 7% below asking price. In the R2.6m to R3.6m price range, it took an average of 8 weeks and 4 days to sell, and properties sold at 8% below asking price. In the R2.6m and higher price ranges, it took an average of 9 weeks and 4 days to sell, also at an average of 8% below the asking price.
• The Western Cape once again outperformed the rest of our country, and properties were sold faster than anywhere else, at an average time of below 5 weeks. Gauteng, on the other hand, recorded the longest selling times at an average of 12 weeks and 4 days, with a high proportion of sales being concluded below the asking price.
• Economist John Loos points out in a recent newsletter that our inflation rate is steadily on the rise – from the beginning of this year to July, the average CPI inflation was 3.9%, but the July year-on-year inflation rate was recorded at 4.3%. Interesting to note is that the average inflation rate for 2025 was 3.2%. Coupled with more radical fuel-price increases expected in October, this is not good news as renewed upward pressure on the CPI inflation rate will follow, which in turn could lead to another interest rate hike this year. Without doubt, this will put ongoing downward pressure on our SA Property Market, where higher costs to repay outstanding credit and rising day-to-day living costs, will further reduce disposable income and people’s appetite to invest in property.
• We are already experiencing at Heiberg Estates that prospective Buyers are once again adopting a wait-and-see attitude, where they are postponing property buying in expectation of more interest rate hikes to follow towards the end of this year and the beginning of next year, and are rather opting to rent or not sell their existing properties anymore.
• On the rental side, interest in good and well-located rental properties is growing. General affordability limitations and tighter lending conditions, coupled with worldwide and local economic uncertainties, are making the rental option much more attractive and feasible for many Buyers for the time being and especially in the lower price ranges.

Our SA Property Market continues to grow despite an increasingly changing and challenging macroeconomic environment. At this stage, and with a much lower yearly economic growth rate that is now expected to be around only 1%, economic and affordability pressures are increasing for potential property investors. Economists are predicting a moderate 4% to 4.5% price increase in property prices for the remainder of the year, with the market lacking broad-based buyer momentum and as well as with general declining business confidence. Affordability and stock supply shortages remain challenging factors for our property market, especially in the lower and middle-income brackets.

We are virtually SOLD OUT AND SHORT OF ALL PRICE RANGES STOCK, so kindly contact us or refer people to us whom you might know are wanting to sell their properties in the OLD EAST of Pretoria! It will be deeply and sincerely appreciated!

Your Heiberg Estates Team remains at your side 24/7, and we await your call or a visit to our offices for a chat and a nice cup of coffee – please don’t hesitate to contact us!

Enjoy your holiday!

Yours faithfully

Bambie & Heiberg Estates Team