Since January 2010, the average real (CPI inflation-adjusted) national house price has cumulatively declined over almost 16 years. The October 2025 real (CPI inflation-adjusted) house price index was still -1.4% below the level of January 2010.
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The annual national residential property price inflation was 6.8% in October last year, an increase from 6.3% in September 2025.
The residential property price index (RPPI) increased by 0.7% month-on-month in October 2025.
This is according to the Residential Property Price Index Report published by Statistics South Africa (Stats SA) on Thursday. The Residential Property Price Indices (RPPIs) measure the changes in the price of residential properties.
StatsSA October House Price Index continued to point to accelerating growth late in 2025, with a mildly more conducive environment for new home building, says John Loos, an independent economist.
Reacting to the data, Loos says the highlights for the StatsSA October 2025 House Price Index are:
According to Loos, Thursday’s StatsSA’s House Price Indices for October 2025 showed a further acceleration in national average year-on-year house price growth in October 2025, to a rate of 6.8%, from the previous quarter’s 6.3%.
“This continues a strengthening trend from a low rate of around 1.5% in late 2023. This year-on-year rate is well-above CPI (Consumer Price Index) inflation, which implies further positive real (inflation-adjusted) growth of 3.14% in October.”
However, the economist says the longer-term history since the start of this index back in January 2010 paints a cumulatively mediocre performance picture.
“Since January 2010, the average real (CPI inflation-adjusted) national house price has cumulatively declined over almost 16 years. The October 2025 real (CPI inflation-adjusted) house price index was still -1.4% below the level of January 2010.”
He says that this was largely reflective of a decade-and-a-half of mediocre economic growth in South Africa, constraining the growth in employment and income (purchasing power) of households.
According to the February 2026 BetterBond Property Brief, the average house prices continued with the improved upward momentum that has been evident since the prime lending rate (via the Reserve Banks repo rate) declined by more than 100 basis points, which occurred during the second half of last year.
Since then, the bond originator says two further cuts have materialised, translating in a current prime lending rate of 10.25%. It says that in January, a YOY increase of 4.1% was recorded for all buyers, while average house prices for first-time buyers (FTB) only increased by 1%.
“Viewed from a two-year perspective, average house prices for all buyers and FTBs have increased by 8.3% and 8.5%, respectively, reflecting modest real increases (after adjustment for inflation).
"If house price increases continue to outstrip the rate of increase in the consumer price index (CPI), the residential property market may start to attract speculative investment buyers, which should lead to even higher rates of house price increases.”
The Western Cape, the outperforming residential market of the major SA markets, was the single biggest contributor to the overall national house price growth rate.
Loos says StatsSA attributes 3.5 percentage points of the 6.8% national house price growth rate to that province. He says the Western Cape’s year-on-year house price growth
rate in October 2025 was 9.1%, nearing double-digits, while Gauteng was a significantly slower 4.6% and KZN, the third major residential market, 3.3%.
It is believed that the SARB will likely continue to keep interest rates unchanged for much of 2026, waiting for something of a near term escalation in inflationary pressure to pass through the CPI, says Loos.
He says if South Africa is to have any further interest rate cutting this year, it is expected to be right at the end of the year.
“This implies less residential demand growth stimulus in 2026, compared with 2025. The result is expected to be national house price growth peaking at a stage in the first half of 2026, before a gradual slowdown in the 2nd half and into 2027.
"Nevertheless, a solid average 6% house price growth for 2026 as a whole is expected.”
The economist says this year is expected to be the peak in terms of average annual house price growth in the current short-term cycle.
He says the key risk to the solid average house price growth expectation in 2026 is the conflict in and around Iran, which poses a major oil price shock risk for as long as it lasts.
“A prolonged period of high oil prices, and the resultant inflation surge that this can bring, can lead the SARB to start hiking interest rates 'early'.
"But while that is a risk scenario, the base case is one where the conflict is resolved, major releases of oil reserves are sufficient to alleviate major shortages while the conflict lasts, and any inflation uptick is short-lived.”
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