Property prices in South Africa’s most important city could decline significantly

Property values in the City of Johannesburg could decline significantly unless the city turns around its dire financial situation.

This is the warning given by Chas Everitt International CEO Berry Everitt, who urged the city’s officials to act calmly and responsibly in restoring financial stability.

Everitt warned that a worsening of the situation could severely erode investor confidence in the city, which would ripple throughout the country’s economy.

“The most important thing is for everyone involved to keep a cool head and do what is best for the city and South Africa as a whole,” Everitt stressed. “Johannesburg is not just another municipality.”

“It is the economic engine room of South Africa and a major gateway for foreign investment into the country. If confidence in the city collapses, the effects will be felt throughout the national economy.”

Finance Minister Enoch Godongwana recently sent a letter to Johannesburg Mayor Dada Morero, threatening to pull funding to the city if it did not address its finances.

Godongwana called on Morero to cancel a R10.3 billion wage agreement with the South African Municipal Workers Union (SAMWU), alleging it was signed illegally, whilst knowing the city could not afford it.

Everitt said this tense situation had already sown uncertainty among investors and property owners throughout the city, especially ahead of the country’s municipal elections later this year.

Persistent issues of governance failures and poor service delivery could further reduce the city’s attractiveness as a place to live and work.

This would negatively impact both the residential and commercial property markets in the city, as Everitt explained that these property values are reliant on investor confidence.

“People invest in homes, developments and businesses when they believe a city has a stable future, functioning infrastructure and credible financial management,” Everitt said.

“If that confidence is lost, property values can stagnate or even decline, which ultimately would harm every homeowner, investor and business in the metro.”

Cooperation is key to turning the city around

Godongwana met with Morero on 8 May 2026 to discuss the concerns raised by the Finance Minister in his letter around the city’s finances.

Both parties described the meeting as productive and acknowledged that miscommunication on both sides may have created misunderstandings.

Morero told eNCA that the figure of R25.2 billion owed by the city to its creditors, as listed in Godongwana’s letter, was only accurate as of the end of the previous financial year on 30 June 2025.

“Where we are now, we have cleared all of those issues,” Morero said. “We have paid what was owed and are now sitting at about R6.8 billion, of which 60% is current.”

Morero also said he explained to the Finance Minister that the city is not in any financial distress, and that it can and will continue with its wage agreement with SAMWU.

Godongwana said Morero and his officials had agreed to submit a formal report to the National Treasury regarding remedial action the city will take in response to some of the issues raised.

Everitt told 702 that while the outlook for Johannesburg’s property market had looked promising toward the beginning of the year, the current political situation threatened to derail this.

“There’s been a strong increase in home sales this year,” Everitt said. “And I certainly believe that election periods always create some kind of uncertainty.”

“But I worry that the political considerations of the current situation could start influencing financial and governance decisions in ways that undermine the long-term stability of Johannesburg.”

Everitt said the outcome of this situation would be largely dependent on how the various parties involved carry themselves in the lead-up to the elections in November.

He urged all stakeholders to place the interests of the city ahead of their own short-term political positioning, warning that the opposite would have dire consequences for the city’s economy and property market.