MTBPS 2025: assessing the impact on South Africa's property market

The 2025 Medium-Term Budget Policy Statement (MTBPS) arrives at a time of cautious optimism for the property market, which has gradually stabilised after two tough years. 

Inflation has cooled to within the SARB’s 3-6% target band (around 3.4 % year-on-year in September 2025), says Paul Stevens, the CEO of Just Property.

Interest rate cuts support affordability 

He says South Africa has already had 75 basis points reduced this year, and the Reserve Bank held the repo rate at 7.00% at its September 2025 meeting.

“This stability, following a mild rate-cutting phase earlier in the year, is supporting affordability and sentiment. We are cautiously awaiting news of potential further cuts this month – economists differ on whether a cut is on the cards or not.”

The property sales, rentals, and management services provider says that from a fiscal perspective, National Treasury’s continued focus on infrastructure spending (more than R1 trillion in planned investment across transport, energy and water) remains critical.

It says better service delivery and functioning municipalities will directly influence confidence and neighbourhood fundamentals, which are the real levers of property value. However, it says uneven local-government performance and constrained business sentiment still weigh on momentum. 

Budget 2025 gives the property sector subtle support

According to Just Property, the 2025 Budget has provided subtle but welcome support for both homeowners and buyers.

The company says lower inflation and gradual rate cuts have begun to feed through: with the repo at 7.00%, an average homeowner with a R1.695 million bond could save around R1 438 per month compared with pre-cut levels, a tangible improvement in affordability.

“Another positive change was the higher transfer-duty exemption threshold of R1.21 million (up from R1.1 million). This reduces upfront costs for many first-time buyers and helps more South Africans enter the market.

"Treasury had proposed a small VAT increase to 15.5% in February 2025, but later withdrew, leaving the rate at 15%. Overall, the Budget contributed to stability for property by improving affordability and lowering transaction barriers. These small shifts add up to meaningful relief.”

Absa's latest Homeowners Sentiment Index (HSI) for the third quarter of this year shows that rising homeownership aspirations among single women continued to spur activity in the residential property market, with more women applying to purchase homes for the first time.

The Index found that female applicants account for more than half of all first-time homebuyer applications in 2025 to date.

“We’ve seen strong optimism in the property market hold steady over the past year, and what’s encouraging is that people are acting on it,” said Tshepo Mashashane, head of strategic positioning and partnerships at Absa Home Loans.

“It’s especially positive to see more women stepping into homeownership for the first time. It shows that the market is not only recovering, but also diversifying in meaningful ways.”

Overall, the homeowner sentiment declined marginally by one percentage point to 85% from the previous quarter, but was still high by historical standards.

Residential property on steadier ground

Stevens says residential property is ending this year on steadier ground. He says activity is strongest in the lower- and mid-value segments, where affordability gains from lower interest rates are most pronounced.

“The rental market remains resilient with average escalations supporting healthy investor yields.”

Commercial property performing

The CEO says that in commercial property, industrial, logistics, warehousing and convenience-anchored retail are performing, while the office sector continues to face structural vacancy pressures.

“Investors are focusing on tenant-driven refurbishments rather than speculative builds.”

2026 sector outlook 

Looking into 2026, the property sales, rentals, and management services provider says a sustained environment of stable inflation and consistent service delivery could translate into measured, sustainable growth-not a boom, but a healthier, confidence-based recovery.

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