Hung councils leave South Africa's property recovery in coalition hands

South Africa's 2026 local government elections have left 127 of the country's 213 municipal councils hung, with no party holding an outright majority, while a further 72 councils have outright majorities. The outcome means coalition negotiations will determine who governs many municipalities and how they respond to pressing financial and infrastructure problems.

The ANC remained the largest party nationally, while the DA won an outright majority in Cape Town. The DA emerged as the largest party in Johannesburg, Tshwane and Ekurhuleni, while the MK Party led in eThekwini, but none of the seven metros outside Cape Town has an outright majority. In Johannesburg the DA won 91 of 270 seats, followed by the ANC with 63 and ActionSA with 43. In Tshwane the DA secured 74 of 214 seats, with ActionSA on 48 and the ANC on 44, while in Ekurhuleni the DA took 66 of 224 seats, the ANC 59 and ActionSA 40. In eThekwini the MK Party won 86 of 223 seats, ahead of the DA on 57, the ANC on 37 and the IFP on 15.

For property owners and investors, the question is whether the new political arrangements can provide the stability and administrative capacity needed to address municipal debt, infrastructure backlogs and unreliable services. Gerhard Kotze, chief executive and franchisor at RealNet Properties, said municipal outcomes directly affect the infrastructure and services that underpin suburbs, while global capital flows and rate expectations take their cues from the United States. "Politics creates noise, but it does not steer the tide," Kotze said, arguing the true drivers remain interest rates, bank lending criteria, household affordability and supply and demand. What does change overnight, he added, is client psychology.

Charles Everitt, group chief executive at Chas Everitt International Property Group, said the country's housing register signals need rather than a ready market. In June 2026 Parliament's Portfolio Committee on Human Settlements reported approximately four million people registered on the National Housing Needs Register, against 523,483 applicants approved through the Housing Subsidy System, and raised concerns about duplicate, unverified and ineligible applicants. Everitt said reliable water, sanitation, electricity, roads and timely municipal approvals were essential to give developers the confidence to plan serviced land and affordable housing projects, and to help banks finance viable developments and qualifying buyers. He noted that construction generated total income of R605.6 billion in 2024, with small and micro enterprises accounting for 55.3 per cent of construction jobs.

The financial starting point is weak. In his 2026 budget speech, Finance Minister Enoch Godongwana said 63 per cent of municipalities were in financial distress. Johannesburg faces a R64 billion water infrastructure repair backlog, collecting R11.9 billion in water revenue but allocating only R1.3 billion to Joburg Water for capital expenditure. David Ingle, a real estate principal, said whoever takes charge of Ekurhuleni inherits a municipality that owed creditors about R7.4 billion as at 31 May 2026, with Eskom and Rand Water among those awaiting payment.

Affordable housing developer Affordable Living Solutions Africa said the results had created cautious optimism that changes in municipal leadership could help address structural obstacles holding back Gauteng's property industry, but cautioned that a sustainable recovery would also depend on job creation, since investment in affordable housing needs matching employment growth to give more households the means to buy.