South Africa's property market is gearing up for a period of stability and steady growth, according to experts at Chas Everitt International property group. This positive outlook follows the announcements made by Finance Minister Enoch Godongwana in the Medium Term Budget Policy Statement (MTBPS).
Lower Inflation Target: A Game Changer?
Berry Everitt, CEO of Chas Everitt, believes that the move towards a lower inflation target of 3%, coupled with improvements in national debt management and new incentives for private sector infrastructure investment, creates a more predictable environment for everyone involved – buyers, investors, and developers alike.
"The Minister’s announcement of a new 3% inflation target, with a tolerance band of 2% to 4%, is a significant step towards stabilising prices and aligning South Africa with developed economies," Everitt explains. "Over time, lower inflation expectations should lead to sustained reductions in interest rates, even from their current levels."
What This Means for Home Buyers
For those looking to buy property, this news is particularly encouraging. Lower interest rates translate directly into improved mortgage affordability, potentially opening up the market to more South Africans. Everitt also anticipates stronger household confidence and a renewed appetite from investors, following years of challenges caused by rising living costs and tight credit conditions.
Fiscal Discipline: A Sign of Stability
Fiscal discipline was another key takeaway from the MTBPS. With national debt projected to stabilise at 77.9% of GDP in the 2025/26 financial year, and a primary budget surplus expected to reach R224 billion by 2028/29, the Minister's message was one of consolidation and control.
"This reversal of rising public debt reduces pressure on long-term lending rates, which will support property financing for both private buyers and commercial developers," Everitt adds. "Lower debt-service costs will also free up government funds for essential services like infrastructure, health, education, and crime fighting, boosting investor confidence and stimulating economic growth."
In conclusion, the recent budget announcements paint a promising picture for the South African property market, suggesting a period of stability and growth ahead.