South Africa’s faces the likelihood of an economic growth slowdown, a more prolonged inflation surge and interest rate hikes.
Early in the US/Israel-Iran conflict, the hope was that it would be short-lived, with shipping via the Strait of Hormuz normalising fairly swiftly, says John Loos, an independent economist.
He says this is as the conflict moves into the third month with little sign of being resolved and the global oil stocks reportedly running down.
“The result is likely to be a more cautious and constrained consumer, with constrained demand for luxury, non-essential, postpone-able, credit-dependent spending items … and big ticket items such as home buying,” Loos says.
The next scheduled interest rate decision announcement by the South African Reserve Bank (SARB) will take place later this month.
Escalating US-Iran tensions pressured broader markets
Monday’s strikes by Iran, on a vessel in the Strait of Hormuz and then on a port in the United Arab Emirates (UAE), in retaliation to United States (US) operations blockading the Strait have put markets under pressure, as fears of further escalation have been sparked, says Bianca Botes, the managing director at Citadel Global.
She says reports of both nations exchanging fire overnight further intensified the risk-off sentiment.
“Brent blew off some steam, after trading as high as $114/barrel overnight and is currently changing hands at just over $113/barrel. Gold recovered some of its losses, on dip buying following a 2% decline yesterday, to trade at $4,535/ounce.”
Tracking lower due to the prevailing risk-off sentiment, the rand is under pressure, trading at R16.88/$ against the dollar, R19.64/€ against the euro, and R22.73/£ against the pound, Botes noted.
Monday saw the USD/ZAR open around the mid-16.60s, with early trade relatively quiet amid thin flows and limited market direction, says Reezwana Sumad, a research analyst at Nedbank CIB.
She says risk sentiment deteriorated sharply after Iranian media reports claimed missiles had struck a US warship.
“Although the reports were later denied by US officials, the headlines were enough to spark a broad risk-off move across markets. This drove demand into the dollar and pushed the USD/ZAR sharply weaker towards 16.8800.
“This morning, we opened at 16.8325. Broader markets also came under pressure as tensions between Iran and the US continued to escalate.”
The research analyst says reports of an alleged Iranian drone attack on UAE oil infrastructure added to fears of further instability across the Middle East.
She adds that major currencies including euro, British Pound and Japanese Yen opened weaker than yesterday, currently trading at 1.1684, 1.3524 and 157.22, respectively, against the USD.
“The geopolitical uncertainty triggered moves in both currency and commodity markets, with gold seeing a sell-off, reaching a low of USD4,514 yesterday. This morning, it rebounded, opening at USD4,549.”
Homebuying potential impact
According to Loos, the following applies:
1. Home buying demand to slow: Existing home transactions can be expected to decline should interest rates rise, due to the high degree of dependence on credit in this area of demand.
Aspirant first-time home buyers are likely to sit on the sidelines, either in their family homes or in rental properties, for a little longer.
2. However, the supply of existing homes on the market can also be expected to decline, albeit not as much as the decline in demand.
This expected supply decline is the result of aspirant repeat home buyers staying put in their current homes in larger numbers, fewer households looking to sell in order to upgrade at this stage, and fewer relocation plans for employment purposes in a tougher labour market.
3. Home selling to downscale due to financial pressure may, however, increase mildly as the oil shock puts more pressure on the household.
4. Residential building activity to slow once more? Also likely to be short-lived, should interest rates indeed rise, is the recent modest growth in new residential building activity.
No clearly defined resolution
The month saw the continuation of the US-Iran conflict, a ceasefire that held (except when it didn’t), and a crisis now 65+ days in without a clearly defined resolution, says Garreth Elston, a Real Estate Investment Professional.
Releasing the Golden Section Capital’s SA Listed Property Review for April 2026, he says the property sector is holding up well for now, but a few more months of fuel price increases and a potential rate hike or two may change that picture.
“We continue to hope for rational leadership to end this war and its deepening negative global impact.”
Busiest months for the sector’s corporate activity
On the numbers, he says the sector delivered a meaningful April recovery: the J803 All Property Index returned 5.76% and the J253 5.40%, with one-year rolling returns of 28.16% and 26.01% respectively.
It was also one of the busiest months for corporate activity the sector has seen in recent memory, he says.
According to Paula Hardy Real Estate, SA’s commercial property market is valued at USD10.72 billion (R180bn) in 2026, and growing at 7.31% per year through to 2031.
The agency says Johannesburg commands over 35% of national revenue, anchored by its northern nodes: Waterfall City, Midrand and Sandton.
“For tenants and investors looking to move in 2026, the data is clear – this market is expanding, not contracting.”
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