Thousands of middle-income families, including many in Gauteng, continue to feel the strain of rising transport costs, increasing rentals and stubborn inflation, with economists warning that pressure on household budgets is far from over.
The findings are contained in Professionals and Business for Change PBC’s Middle-Income Inflation Monitor – June 2026, prepared by Matlhodi Matsei, Lead: Cost of Living Research & Advocacy,found that inflation experienced by middle-income households rose to 4.1% in June, up from 3.9% in May. The increase pushed middle-income inflation above the 4% mark for the first time in nearly two years, while national headline inflation accelerated to 5%.
The report found that transport remains the biggest contributor to the rising cost of living, driven by higher fuel prices compared with a year ago, despite food inflation easing to its lowest level since 2010.
Lead researcher Matlhodi Matsei said households are spending an increasing share of their income on essentials such as transport, housing and insurance.”The Middle-Class Squeeze Indicator widened sharply to 2.1 percentage points as accelerating costs for core necessities continued to outpace inflation on non-essential goods,” she said.The indicator measures the gap between inflation on essential goods and services, including food, housing and transport, and inflation on discretionary spending. A widening gap means families have less disposable income after paying for necessities.The findings are particularly significant for Gauteng, where thousands of residents spend hours commuting to work each day while facing rising rental costs in Johannesburg, Tshwane and Ekurhuleni.
FNB Senior Economist Siphamandla Mkhwanazi said pressure in the housing market is also adding to the financial strain.”Entry into home ownership remains elusive for many people, so they remain in the rental market for a long time. Vacancy rates have been declining over the past few years, while the supply of new housing units has also fallen. Those factors continue to support rental growth despite a relatively weak labour market,” he said.Rental inflation rose to 4.1% year on year during the second quarter of 2026.
Mkhwanazi warned that inflationary pressures could persist, with the South African Reserve Bank likely to consider raising interest rates in September if inflation risks continue to build.”We expect inflation to peak only during the first quarter of next year, suggesting that cost pressures are likely to remain with households for some time,” he said.The report also cautioned that renewed tensions in the Middle East could push global oil prices higher, increasing the risk of further fuel price hikes and adding to transport costs in the months ahead.
Institute of Race Relations senior fellow Gabriel David Crouse said transport remains one of the biggest financial burdens for South African households, particularly in Gauteng where many workers travel long distances between affordable housing and employment centres.”Some people are spending more than 40% of their income simply getting to and from work. In some cases, they cannot even afford to travel to look for employment,” he said.
Crouse said rising living costs are also making it harder for households to save or reduce debt, withqqqq more income being consumed by basic necessities.While lower food inflation has provided some relief, economists say Gauteng’s middle-income families are likely to remain under pressure as housing, transport and borrowing costs continue to rise, leaving many households with little room to absorb further increases in the cost of living.
