The property industry reacts to July 2026’s interest rate hold.
The announcement today by South African Reserve Bank (SARB) Governor Lesetja Kganyago of a hold in the repo rate at 7% and the prime lending rate at 10.5% has taken many by surprise given elevated oil prices due to geopolitical tensions.
The expectation was for a hike given a recent spike in inflation, which Kganyago explained was heavily driven by fuel costs, whereas other consumer goods prices stayed mostly stable. He reaffirmed that the central bank's core mandate is to stabilise inflation around the 3% target over time (insert link to the inflation article).
The reaction by those connected with the property industry is overall positive:
Stephan Potgieter, CEO of BetterHome Group Mortgage Origination and BetterBond:
Although the rand has remained steady and oil prices are lower than they were in May, today's decision to leave the repo rate unchanged reflects the Reserve Bank's cautious approach to inflation. Holding rates unchanged allows the Monetary Policy Committee (MPC) more time to assess whether these risks will filter through to the local economy.
For homeowners, this is welcomed at a time when households continue to face rising electricity and living costs.
Harry Scherzer, CEO of Future Forex:
While inflation is still sitting above target, the Middle East ceasefire that eased the oil shock back in May has since collapsed, and crude is climbing again. This hold isn't the Bank signalling comfort but rather buying time in a genuinely fragile balance. The real story here isn't the rate itself; it's how exposed the rand stays to the next data point.
Gerhard Kotzé CEO RealNet Properties:
I am relieved and commend the MPC for not reacting with a knee-jerk response to recent inflationary pressures. We have learnt expensive lessons in the past when inflation was allowed to get out of hand, forcing more aggressive rate hikes later. Today's decision reflects a balanced approach that considers the broader macroeconomic risks while recognising the impact higher interest rates have on ordinary South Africans, their affordability and, ultimately, their ability to remain in their homes.
Adrian Goslett, CEO and Regional Director of REMAX Southern Africa
Keeping the interest rate unchanged offers some short-term relief to homeowners and prospective buyers. While holding rates steady won't reduce bond repayments, it does provide households with greater certainty at a time when many are carefully managing their finances.
"Opting to keep interest rates unchanged suggests that the SARB is taking a measured approach. While inflation risks remain, the SARB has also recognised the importance of not placing unnecessary additional pressure on consumers and businesses unless circumstances require it.
Rhys Dyer, CEO of the ooba Group:
While there is limited room for further interest rate cuts in the near term, maintaining the current rate will help preserve stability in the housing market. In an environment characterised by global volatility and persistent inflationary risks such as this week’s announcement of a consumer inflation figure of 5.0% for June, maintaining the current rate supports confidence among homebuyers and homeowners.
Stable borrowing costs allow consumers to plan with greater certainty and should help sustain momentum in the residential property market.
Dr Andrew Golding, chief executive of the Pam Golding Property group:
The MPC members faced a particularly difficult decision following the release of the June Consumer Price Index (CPI), which rose to a higher than anticipated 5%, up from 4.5% in May. Of particular concern is that, with oil prices rising above US$90 a barrel and the rand under pressure, the inflation outlook has become more challenging, particularly as tensions in the Middle East continue to escalate.
However, today’s decision provides welcome relief for consumers with debt, including mortgage holders, and for prospective home buyers. While households continue to contend with elevated fuel prices and rising electricity and municipal tariffs, the decision offers greater certainty for consumers and businesses at a time of heightened global economic uncertainty.
Samuel Seeff, chairman of the Seeff Property Group:
This step is a necessary measure for stability and avoids punishing overburdened consumers and the economy further. The news of an improved inflation outlook and potential restart of the rate-cutting cycle at a later stage is also welcomed. It avoids further shocks to consumers and the economy. As it is, consumers have had to absorb significant cost pressures beyond their control due to imported fuel spikes and excessive electricity tariffs resulting from years of poor governance.
The decision is also good for the property market, as buyers will not have to face further borrowing cost hikes for now. We are still seeing overall transaction volumes down by about 18% compared to five years ago, despite resilience in the market.
Lytania Johnson, FNB CEO, and Mamello Matikinca-Ngwenya, FNB Chief Economist
Johnson: This decision brings welcomed stability for consumers and businesses navigating a challenging economic environment. While financial pressures persist across many households and sectors of the economy, a stable interest rate environment creates an opportunity for customers to manage their finances with greater confidence, improve their financial position, and make more informed long-term decisions.
Matikinca-Ngwenya: Keeping rates unchanged has struck a balance between supporting a fragile growth environment and preserving the credibility of the transition towards a lower inflation target. Recent business and activity indicators continue to point to a soft domestic economy, with confidence weighed down by higher operating costs and still-tight financial conditions. Against this backdrop, the decision to hold rates recognised the limited momentum in growth while allowing the SARB to maintain a cautious stance as inflation converged towards its 3% objective.
Daniela Du Plessis of Tyson Properties:
The decision marks a welcome reprieve for property owners. We expect a downward rate-cutting cycle to resume and even catch up with the continued levels in place at the end of 2025 as soon as global tensions recede.
Another 0.25% interest rate hike remains on the table as inflation has breached the new 3% target set by the Reserve Bank and is even expected to continue to climb after July. In the residential property market, a rate increase will elevate borrowing costs, reduce buyer affordability, and increase default risks.
Berry Everitt, CEO of Chas Everitt International:
Many households had been expecting an increase in borrowing costs after recent spikes in fuel prices, electricity tariffs, and municipal charges pushed inflation well above the Reserve Bank's preferred 3% target. Instead, the MPC recognised that consumers are already under considerable financial pressure.
However, the rise in inflation is likely to have one important effect. While the residential market has been gradually shifting from a buyers' market towards a sellers' market, that transition is now expected to happen more slowly. This decision will help to maintain the positive momentum that has been building over the past year.
Stephen Whitcombe, MD of the FIRZT Property Group:
Raising interest rates at this stage would have placed more pressure on households without necessarily doing much to bring inflation back under control. If inflation begins moving lower again as external pressures subside, the Reserve Bank should eventually have greater scope to resume reducing interest rates. That would provide welcome relief for existing homeowners with variable-rate home loans while improving affordability for first-time buyers and households looking to move into larger homes.
Keeping interest rates at their current level will help to maintain confidence in the South African economy and support the value of the rand.
