South Africa’s Development Shift: What to Expect in 2026

Introduction

South Africa’s construction sector in 2025 stands at a turning point. While material costs remain volatile and the electricity grid continues to strain under demand, appetite for development has not slowed down. From high-end residential clusters to affordable housing and commercial hubs, a new development shift is emerging.

The real challenge is whether developers can balance speed, quality, and sustainability as 2026 approaches.

Key Drivers of the Shift

1. Urbanisation & Housing DemandAlmost two-thirds of South Africans now live in cities. Johannesburg, Cape Town, and Durban face mounting pressure for mixed-use developments and higher-density housing. Yet, the national housing backlog still exceeds 3.4 million households, growing by an estimated 178,000 units each year. Developers who can deliver well-designed, affordable solutions will play a critical role in reshaping the urban landscape.

2. Infrastructure InvestmentPublic-private investment is expanding across renewable energy, transport, and municipal services. In June 2025, South Africa secured a US$1.5 billion World Bank loan to upgrade critical infrastructure, while national planning documents highlight construction and housing as key growth sectors. For developers, this represents both opportunity and responsibility: aligning projects with the country’s infrastructure roadmap will unlock long-term resilience.

3. Private Sector MomentumInvestors are seeking resilient property assets. Prime examples include logistics hubs, warehousing linked to e-commerce, and gated residential estates that offer both lifestyle and security. Demand is shifting towards developments that provide value beyond square metres - including energy efficiency, connectivity, and integrated amenities.

Trends to Watch in 2026

Affordable Housing With DignityThe demand for affordable homes is surging, but cost-cutting is no longer acceptable. Developers must prioritise dignity in design - ensuring that affordable units remain safe, sustainable, and aspirational.

Green Building as DefaultGreen construction is no longer a premium offering. Over 1,200 projects in South Africa have already achieved certification through the Green Building Council of South Africa. Certified offices are outperforming non-green peers by up to 24% in cumulative capital growth since 2016. As load shedding and water scarcity persist, on-site renewables, efficient insulation, and resource-wise systems are fast becoming the baseline.

Community-Driven SpacesMixed-use precincts that combine housing, retail, offices, and green spaces are setting the standard for urban development. Successful projects will be those that foster connection and inclusion, rather than separation.

Digital ConstructionFrom Building Information Modelling (BIM) to drone surveys and AI-assisted project scheduling, digital tools are transforming the way projects are planned and delivered. For developers, this means more control over costs, faster timelines, and fewer risks.

Challenges on the Horizon

This shift will not be without its challenges. Rising construction costs, skilled labour shortages, and supply chain disruptions remain obstacles. Climate risks - including floods, heatwaves, and water scarcity - require designs that are resilient and future-ready.

The Path Forward

South Africa’s construction sector is entering a decisive period. 2026 will reward developers who can think beyond profit and deliver sustainable, human-centred projects that leave a lasting legacy.

At AfricanTree Developments, we believe construction is about more than walls - it’s about building value, experiences, and futures.