It was no real surprise that the South African Reserve Bank’s Monetary Policy Committee (MPC) decided not to decrease the repo rate in this fifth round for the year. “The policy rate remains unchanged at 7%,” said Governor Lesetja Kganyago. This also means the prime lending rate remains at 10,5%.
Whilst not unexpected, the real estate industry is still disappointed!
REMAX Southern Africa
Regional Director and CEO Adrian Goslett commented that “while we understand the SARB’s need to act cautiously in the face of global uncertainty, today’s decision is likely to come as a disappointment to many South Africans who were hoping for some financial relief. Consumer budgets are still stretched owing to slow economic growth. Even a small rate cut could have provided a welcome buffer for homeowners and potential buyers alike.
“The property market has shown resilience in the face of numerous challenges. Our network’s results outperform the broader market conditions. Overall, growth within the local housing market remains hampered until there is a more meaningful reduction in interest rates or a notable improvement in economic conditions. We remain hopeful that conditions will allow for a rate cut in the second half of 2025. In the meantime, we encourage homebuyers to make use of favourable property prices and lenders’ appetite to finance well-qualified applicants.”
BetterBond
Bradd Bendall, National Head of Sales, says that while another repo rate cut would have been welcome, today’s decision to hold the prime lending rate steady signals the Reserve Bank’s commitment to bringing inflation closer to the anchor target of 3%. "For homeowners, it means short-term restraint, but also the potential for renewed momentum in the property market once the next cycle of rate cuts begins, hopefully in the months ahead. Five repo rate cuts since September last year have already stabilised conditions, and BetterBond’s latest figures show home loan applications are up 14% year-on-year in July and August.
“House prices are also strengthening, up 2.1% year-on-year, with the average purchase price for first-time buyers reaching a record R1.3 million in July and August. Deposit requirements have also eased, dropping 5% year-on-year according to BetterBond’s latest data. Holding the repo rate steady could lead to a stabilisation of property prices, which, coupled with favourable deposit requirements, could make the market accessible to more buyers. It also sends a strong signal to investors about the Reserve Bank’s focus on stability and long-term economic growth.”
Seeff Property Group
The decision by the Reserve Bank to retain the repo rate unchanged is a huge missed opportunity for the economy and property market, says Samuel Seeff, chairman of the Seeff Property Group.
“Based on the currently favourable economic fundamentals, there was ample room for the Reserve Bank to provide another rate cut. Inflation has moderated to 3.3%, comfortably near the Bank’s lower target range, and the rand has remained stable at around the R17.50/USD range despite the unresolved US trade challenges.”
Commenting on the property market, Seeff says market activity has improved, with many Seeff branches reporting improved sales and depleting stock levels. “Market conditions in most areas remain favourable for buyers, with the interest rate lower compared to mid-2024. Depleting stock levels now also provide impetus for more sellers to come into the market, especially since prices are up.”
Tyson Properties
Chris Tyson, CEO of Tyson Properties says that this week, it emerged that the Consumer Price Index (CPI) decreased by 0,1% between July and August, with four of thirteen categories in the inflation basket (including food and non-alcoholic beverages, which contribute to household spending) and household equipment and routine maintenance dipping. “Economists remain hopeful that inflation will remain in the acceptable 3% to 6% band going forward.
“However, this does not necessarily mean that households are finding it any easier to manage monthly expenses,” Tyson points out. “Sometimes statistics mask the daily grind, and, despite indications of a slight uptick in retail activity, overall consumer demand remains low.”
Although acknowledging the relief that rate cuts offer to stressed households, Tyson continues to urge property owners to budget wisely and repay mortgages at an existing slightly higher level whenever possible in order to reduce the overall repayment period. He also encourages investors to take advantage of the current buyers’ market to invest in income-generating properties as the already thriving rental market “is likely to continue its upward climb whilst economic uncertainty and low growth persist.”
High Street Auction Company
Greg Dart, Director, says that investors that are less dependent on interest rate fluctuations and who are looking to diversify their portfolios away from the stock market and more conventional investment vehicles that are still hypersensitive to ongoing global geopolitical tensions and disruptive tariffs would do well to leverage the auction platform to pick out good investment opportunities.
“Location is now more important than ever for investment, with key hubs such as the Western Cape and parts of KwaZulu-Natal showing early signs of recovery and representing good options.”
ooba Group
Rhys Dyer, CEO of the ooba Group said, “Today’s announcement should be viewed as a pause or recalibration rather than the end of the rate-cutting cycle. It gives the SARB time to balance domestic inflation risks with an increasingly supportive global backdrop.”
Dyer also shared that given the SARB remains committed to its recently signalled shift toward targeting the lower end of the 3 - 6% inflation band, “anchoring expectations near 3% will be essential as headline inflation rises, driven by higher food costs and base effects, which outweigh modest petrol price cuts (only 4c per litre in September),” he says.
Looking ahead, Dyer expects further rate cut relief in November 2025 or early next year. He emphasises that the stability of these cuts plays a crucial role in fostering a favourable borrowing environment for both homebuyers and homeowners. “This not only supports confident investment but also helps to sustain the upward trajectory that we are currently on.”
