Slow economic growth is trapping the South African property market in a cycle of delayed recovery

The combination of easing inflation, lower debt-service pressure, and improving confidence does support a gradual recovery in both rental and homebuyer activity, particularly in more resilient segments and regions. Without faster, sustained GDP growth, unemployment will merely decline slowly, thereby capping the pace of theproperty market recovery. Unemployment is a key constraint that remains in South Africa’s economy, says JP Viljoen, the executive for Asset Ownership at Nedbank.

“One important nuance is that the unemployment improvement is encouraging, but it is partly driven by labour force dynamics and higher discouraged work-seekers,” Viljoen says. For the property market, Viljoen says what matters most is sustained, quality job creation that liftsreal household incomesand confidence. “If we get that alongside a supportive inflation and interest rate environment, the property market recovery becomes both stronger and more inclusive.” According to Statistics South Africa’s (Stats SA) Quarterly Labour Force Survey (QLFS) for the last quarter of last year, there was an increase of 44 000 in the number of employed persons to 17.1 million, while there was a decrease of 172 000 in the number of unemployed persons to 7.8 million compared with the Q3: 2025 results.

“This resulted in a decrease of 128 000 (or 0.5%) in the labour force in the same period. The above changes in employment and unemployment resulted in the official unemployment rate (LU1) decreasing by 0.5 of a percentage point from 31.9% in the third quarter of 2025 to 31.4% in the fourth quarter of 2025. During the same period, Stats SA said discouraged job-seekers increased by 233 000 to 3.7 million, other available job-seekers decreased by 110 000 to 855 000, and unavailable job-seekers decreased by 41 000 to 42 000, resulting in a total net increase of 82 000 to 4.6 million in the potential labour force population (i.e.

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persons who were available but not seeking or unavailable but seeking). The marginal improvement in the unemployment rate is supportive, but on its own, it is not yet a decisive demand catalyst, says the executive. “What it does signal is a gradual stabilisation inhousehold incomesecurity, which typically shows up first in improved rental demand and improved payment performance, and only thereafter in sustained growth in home buying.

“The quality of the employment improvement also matters. This quarter’s movement was helped by a decline in the labour force and a rise in discouraged work-seekers, which means the headline improvement slightly overstates labour market strength.” With that said, Viljoen says the combination of easing inflation, lower debt-service pressure, and improving confidence does support a gradual recovery in both rental and homebuyer activity, particularly in more resilient segments and regions.

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