PROPERTY TRENDS
CONSTRAINED SUPPLY, REGULATORY DEMANDS, AND ERRATIC MUNICIPAL GOVERNANCE ARE FORCING PROPERTY INVESTORS TO RETHINK ASSET STRATEGY AND RISK MANAGEMENT.
In 2026, property investors will need to prioritise flexible, income-resilient assets and actively manage tenant risk to preserve portfolio value. Residential and commercial markets alike are being shaped by constrained supply, increasing regulatory demands and growing disparities in performance linked to the quality of municipal governance.
Waldo Marcus, Director at TPN Credit Bureau, notes that the ongoing shortage of rental housing is expected to continue pushing residential rents higher, while the commercial sector – particularly offices – remains under pressure, albeit with improving vacancy levels as new developments slow.
“ TPN predicts residential rental escalations will hover between 4.5 % and 5.5 % for 2026. This upward trend is supported by provinces like Gauteng, which is expected to see continued positive growth in key residential nodes.
“ The commercial sector, particularly office space, will continue to face downward rental growth, with escalations expected to drop to approximately 3.0 %. However, specific asset types, particularly in storage, industrial hubs and convenience retail, are showing optimism,” says Marcus.
Marcus further explains that while residential rental stock shortages in the Western Cape are expected to ease, the question of affordability remains paramount and rental growth is expected to slow. The fourth quarter of each year typically sees a spike in shorter-term rentals in the province, fuelled by local and international tourism.
“ Gauteng, on the other hand, is expected to continue its upward trend in rental escalations, partly mitigated by the growing trend of commercial-to-residential conversions. Rental escalations in the Eastern Cape are expected to remain flat, while KwaZulu-Natal is expected to continue on an upward trajectory, but at a slower pace. Rental growth is driven by high-demand secure estates along the coastline,” he says.
HERE ARE KEY TRENDS LIKELY TO SHAPE THE PROPERTY MARKET IN 2026: 1. Rental supply and construction costs
• Residential shortages continue to push rents higher.
• High construction costs, labour shortages, and company liquidations limit new development and ROI.
• Commercial oversupply, particularly offices, is being addressed through cost-effective commercial-to-residential conversions.
2. Infrastructure and regulation
• Government infrastructure projects divert resources from private development, raising costs and slowing new builds.
• Developers must invest in bulk infrastructure, pushing up rental prices.
• Reactive regulation adds compliance pressure on short-term rentals, building approvals, and commercial asset transactions.
20 INBOUND SA / FEBRUARY 2026