A sharp rise in housing costs is forcing property developers to confront tighter margins and a growing number of legal complications. The latest market report highlights the activity of Dipula, whose recent deal spree amounts to roughly R3 bn, and the rapid sales at Zimbali Lakes, which generated about R140 m in just two hours.

The central bank kept the repo rate steady at 7.25% while the prime lending rate stayed at 10.75%. In the same period, consumer-price inflation climbed to 4.5% year-on-year, and the house-price index rose by 8.2%. Average monthly rent reached R9,715, and rental growth accelerated to 5.2%, indicating that tenants are shouldering a larger share of the cost increase.

When developers scramble for cash, construction activity can slow, which in turn reduces job creation in a sector already under strain. A dip in new builds also limits the supply of affordable units, a dynamic that may keep overall price growth higher than policymakers would like.

Dipula completed several transactions totalling roughly R3 bn during the quarter. Its portfolio now includes mixed-use projects in major cities, aiming to meet demand for both residential and commercial space. The company says the diversification helps buffer against fluctuations in any single market segment, and it plans to leverage the new assets to attract additional financing.

Zimbali Lakes recorded R140 m of sales within a two-hour window at a recent auction. The rapid turnover reflects strong buyer interest despite broader market headwinds, and the developers attribute the success to targeted marketing and the appeal of the community’s amenities. They expect the momentum to continue as more investors seek tangible assets.

The Cavaleros development reached a milestone of 100 units sold, showing continued appetite for upscale housing. The project’s sales performance has encouraged other high-end developers to reassess their pricing strategies, believing that premium segments can still thrive when quality and location align with buyer expectations.

Rental growth in the Western Cape topped 9.7%, while the long-term bond yield fell to 8.72%. Overall REIT returns rose 2.4% year-to-date, and distribution growth exceeded 11%. These concrete figures suggest that, despite rising costs, investment flows into South African property remain robust.