Property experts weigh in on the SARB's interest rate hold, and how it's expected to impact homeowners and property investors.
A prudent, if unsurprising, holding pattern in an increasingly turbulent global and domestic climate
SARBs decision today to maintain the repo rate at 6.75% is a prudent, if unsurprising, holding pattern in an increasingly turbulent global and domestic climate, according to Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty.
“Governor Lesetja Kganyago’s sobering remarks on a ‘rupture in the global political order’ and ‘new threats to central bank independence’ underscore that this is no ordinary economic cycle.
“The MPC is navigating a perfect storm of geopolitical instability, volatile commodity prices, and specific local shocks like the foot-and-mouth disease impact on food inflation.”
Geffen says given the palpable uncertainty – from protracted international conflicts to the concerning diplomatic and trade tensions between South Africa and the country’s most critical partners, the United States – a “wait-and-see” attitude from the MPC is perhaps the only rational stance.
“The acknowledgement of a stronger rand and lower oil prices providing some respite is welcome, but these are fragile buffers against the larger structural shocks defining the start of 2026.
“This hold continues the trend of stability we have seen since the last hike of 25 basis points in November 2024, which brought the rate to this current 6.75%. Over the past six months, the MPC has consistently signalled a cautious plateau, prioritising the fight against inflation while being acutely aware of the immense pressure on already strained South African households and businesses.”
Geffen says it’s therefore not surprising that economists are divided, reflecting the exceptional uncertainty.
“Predictions for the remainder of 2026 range from a potential cut in the latter half of the year (should inflation subside more convincingly and global conditions improve) to the possibility of another hike if currency or inflation pressures flare up.
“I’m in the the predominant view, however, that an extended period of stability, with the rate remaining higher for longer to anchor expectations and manage risks, is most likely.”
Clarity and Challenges for Residential Property
Geffen say the first repo announcement of the year speaks to the property market going forward.
“The stability in borrowing costs is a positive, allowing buyers and sellers to transact with greater confidence than in a volatile rate environment.
“It sustains a measure of predictability for mortgage holders and those seeking finance. We are likely to see a continued market characterised by selectivity and value-consciousness, rather than a surge or a dramatic contraction.
“However, the high cost of credit continues to be a significant headwind. Affordability remains the primary constraint for first-time buyers and those seeking to upgrade.”
Geffen believes the market will continue to favour the well-priced, quality stock in sought-after areas, while properties that are overvalued or in less desirable locations will struggle. The buy-to-let segment may see sustained interest as rental demand remains robust, but investors will be meticulously scrutinising yields.
“The SARB’s hold is a reflection of a world, and a year, that has unequivocally begun with a new round of shocks. For the property sector, it underscores the need for resilience, accurate pricing, and expert guidance.
“ While the path to lower rates seems delayed by global fractures, the current stability provides a firm, if demanding, foundation for sensible real estate decisions.”
A win for first-time buyers
Fritz Swanepoel, CEO of Leapfrog Property Group says the SARB's decision to hold the repo rate today is a win for first-time buyers looking for a clear and confident entry point into the property market.
After the rate relief we’ve seen since late 2024, the prime lending rate, now sitting at 10.25% - has materially lowered the affordability hurdle. For entry-level buyers in particular, this period of stability brings predictability to monthly bond repayments and improves confidence when planning a purchase.
This stable phase creates an opportunity to secure property at current valuations while benefitting from a more supportive lending environment. My guidance to buyers is simple: get prequalified. The gap between renting and owning has narrowed to the point where ownership is no longer aspirational - it's a smart, sustainable financial decision for the year ahead.
A welcome signal of stability for the South African property market
Adriaan Grové, CEO of MyProperty says the decision by the SARB to keep the repo rate unchanged at 6.75% today is a welcome signal of stability for the South African property market. While many were hoping for a further cut following the relief we saw in November, this steady hand approach by the Monetary Policy Committee (MPC) provides homeowners with much-needed predictability for their monthly budgets.
For those looking to enter the market, this period of stability represents a strategic sweet spot. With the prime lending rate holding steady at 10.25%, the cost of borrowing remains significantly more attractive than the highs of previous years, making homeownership more of a possibility for a broader segment of the population.
Property market steadies as interest rates remain unchanged
As interest rates remain unchanged, it is anticipated that it will bring short-term stability to South Africa’s property market, despite buyers and industry professionals hoping for a cut to improve affordability and boost activity.
While the decision provides a degree of stability for the local housing market, many consumers and property professionals were hoping for a rate cut to offer greater financial relief and stimulate increased market activity as the year kickstarts.
Commenting on the announcement, Adrian Goslett, CEO and Regional Director of REMAX Southern Africa, says that while the outcome may be welcomed from a certainty perspective, it will still be disappointing for homeowners and potential buyers who are under ongoing financial strain.
“Although holding rates steady does offer some predictability for the market, the reality is that many South Africans are still feeling the pressure of a higher cost of living and strained household budgets. A rate cut would have helped ease the burden on consumers and encouraged stronger buyer confidence, particularly among first-time buyers trying to enter the market,” Goslett explains.
The South African Reserve Bank’s (SARB) decision reflects a continued cautious approach, as inflation risks remain a concern and international economic conditions stay uncertain. Despite signs of gradual improvement in some economic indicators, the SARB appears focused on maintaining stability until conditions are clearly supportive of a sustained easing cycle.
“With interest rates remaining unchanged, the property market will likely stay stable for the time being. This could still be a positive window for buyers, especially while property prices remain relatively competitive in most parts of the country apart from the Western Cape, and lending appetite continues for better-qualified borrowers,” he adds.
Goslett concludes by encouraging consumers to keep a close eye on market movements in the months ahead. “Those who are financially prepared may find opportunities in the current market. With the right guidance and a clear understanding of affordability, buyers can still make smart property decisions despite interest rates remaining at the current level.”
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