South Africa’s housing market is heading into 2026 with a clear shift in mood. After two years of painful borrowing costs, the numbers are starting to move in a better direction. Home loan applications rose 8.9% year on year in the last quarter of 2025, even with the usual December slowdown.

Lower Rates are Changing the Game

The prime lending rate has eased to about 10.25%, after a cumulative 150 basis point drop since the peak in 2024. That matters because it directly improves affordability for anyone financing a home. Economists also expect the rate cutting cycle to continue, with two more cuts anticipated in the first half of 2026.

This is a big reason the 2026 property market rebound is getting real traction. In a lower rate environment, homeowners can also cut the long-term cost of a bond by paying extra into their home loan while rates are softer.

Deposits are Easing but First-Time Buyers Still Feel Pressure

There’s also movement on deposits, which have been a deal-breaker for younger buyers. Average deposits for first-time buyers dropped 15% year on year, although the average requirement is still roughly 30% higher than it was at the start of 2021.

Wages have also recovered from the post-pandemic slump, with buyer incomes rising strongly over the past nine years in both nominal and real terms.

It’s not one Market, it’s Multiple Markets

Here’s the part people need to stop ignoring: location is everything. Some areas have tight stock, which supports prices, while others have lots of listings but weaker demand. National house price growth has been nearing 5% in recent data, but that headline number hides major differences between regions.

The Western Cape remains the standout, with an average house price of about R2.1 million, nearly 40% above the national average, and rental pressure in popular areas is still intense. Mpumalanga has also surprised in recent price growth, with an average house price around R1.63 million.

Bottom line: the 2026 property market rebound looks real, but it will land differently depending on where you’re buying, selling, or renting.