A positive signal is sent to the residential property market by any improvement in disposable income.
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For the residential property market, any improvement in household cash flow is significant.
Increased disposable income enhances affordability, supports buyer confidence and strengthens the ability of first-time purchasers to enter the market, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
Reacting to Finance Minister Enoch Godongwana's 2026 Budget, the property group says the National Treasury’s 2026 Budget strikes an appropriate balance, placing strong emphasis on a fiscal strategy that promotes inclusive growth, macroeconomic stability, and the long-term sustainability of public finances.
Equally importantly, it also delivers meaningful tax relief to consumers, it says.
“The tax relief measures announced provide welcome support to consumers at a time of sustained cost pressures.
"Adjustments to personal income tax brackets and rebates to counter bracket creep, together with higher tax-free savings and retirement contribution thresholds, will help protect disposable income and encourage greater long-term financial resilience.”
In an environment where interest rate stability and competitive lending conditions are already underpinning activity, Golding says these measures provide an additional tailwind.
The National Treasury announced the adjustment of personal income tax brackets and rebates to account for bracket creep, together with the increase in the annual tax-free investment limit from R36 000 to R46 000, which provides welcome relief to households.
The raising of the tax-deductible retirement fund contribution cap from R350 000 to R430 000 per annum further incentivises long-term savings and financial planning, Golding says.
In addition, he says increasing the VAT registration threshold for small businesses to R2.3 million will ease administrative pressures on entrepreneurs, while the higher capital gains tax exemption on the sale of a small business by older persons offers further targeted relief.
The compulsory R1 million VAT registration threshold had not been adjusted since 2009. After 17 years of inflation and economic changes, many small businesses are pulled into the VAT net long before reaching a sustainable scale.
Small developers and commercial landlords could be pushed over the R1 million mark without growth in profitability.
Since the value-added tax (VAT) threshold for businesses has not been adjusted for inflation, rising property prices and construction costs can push small developers and commercial landlords over the R1 million mark without real growth in profitability, Tax Consulting SA told "Independent Media Property" last week.
According to the property group, these measures acknowledge the sustained and rising cost challenges facing South Africans, particularly the increasing municipal rates and tariffs for essential services such as water and electricity.
From a housing perspective, he says any improvement in disposable income sends a positive signal to the residential property market.
“First-time buyers, in particular, continue to demonstrate resilience. According to ooba Home Loans, first-time buyer applications rebounded to 48.2% in January 2026, reversing the December 2025 decline.
"Coupled with the prospect of further interest rate cuts during 2026 and continued competitive lending by banks, conditions remain supportive of entry-level demand from the country’s younger demographic.”
The allocation of performance-linked reform funding for metro trading services in electricity, water, sanitation and solid waste is especially encouraging.
In the interim, however, homeowners and buyers are proactively continuing to invest in energy- and water-efficient features, which not only mitigate service disruptions but also enhance property appeal and marketability.
Escalating electricity costs have reignited demand for solar installations, while water supply constraints in certain municipalities have heightened the appeal of water-saving technologies and alternative water sources.
A sustained focus on infrastructure upgrades and the resolution of service delivery challenges in affected metros would materially strengthen housing demand - including investment activity - in those regions.
Ultimately, the housing sector is likely to be influenced more by macroeconomic stability and municipal performance than by direct fiscal intervention, with selective growth in municipalities demonstrating measurable improvements in service delivery.
With the market already in recovery, particularly in the lower and upper price bands, we anticipate that the 2026 Budget will also help stimulate increased activity within the mid-market segment.
On the downside, the increases in the general fuel levy (9 cents per litre for petrol and 8 cents for diesel), the carbon fuel levy (5 cents and 6 cents respectively), and the Road Accident Fund levy (7 cents per litre) are disappointing, as these adjustments will add to inflationary pressures across the broader economy, says Golding.
On the whole, however, he says this is an encouraging 2026 Budget, acknowledging the need for meaningful infrastructural improvements and encouraging investment and greater private sector participation.
While broader economic and municipal performance will remain key determinants of housing market momentum, the Budget’s tax relief initiatives send a constructive signal that should help sustain demand, particularly in the entry-level and mid-market segments.
Finance Minister Enoch Godongwane’s 2026 Budget is mostly good news under the circumstances, says Samuel Seeff, chairman of the Seeff Property Group.
He says the news that the country’s finances and debt are stabilising, and the Treasury is working towards reducing the debt and monthly interest payments that drain the fiscus and detract from service delivery, is certainly welcome news.
Seeff also welcomes the higher economic growth outlook of 1.6% (from 1.4% in 2025), but says it must be acknowledged that it is still too low for any meaningful growth and vital job creation. Fiscal relief and reforms must remain a priority, he adds.
He says the downside for the property sector, though, is that there was no relief, says Seeff.
“We are disappointed that the minister missed an excellent opportunity to provide relief to first-time homebuyers by not adjusting the transfer duty exemption threshold and the CGT tax rates.
"This would have boosted transaction volumes, giving the economy a much-needed shot in the arm and actually helping the government collect more revenue through increased market activity.”
Nonetheless, Seeff says the property market has entered a positive phase for both buyers and sellers, and the Group would like to see it continue to build momentum.
“The favourable mortgage lending climate remains a positive support for the market, and buyers should take advantage of the opportunities.”
This Budget includes some welcome changes that should improve the financial landscape for consumers as it stabilises the country’s finances and protects social spending, Hayley Parry, co-founder of Cumulate and head of financial education at Worth.
However, she says it does not eliminate cost-of-living pressures, and so the real differentiator will be financial capability.
Independent Media Property