Many homeowners and prospective buyers will undoubtedly welcome the decision to leave interest rates unchanged.
Image: Leon Lestrade
Interest rates will remain unchanged in the face of global uncertainty and inflationary risks that continue to shape South Africa's economic outlook.
Delivering the Statement of the Monetary Policy Committee, Lesetja Kganyago, the Governor of the South African Reserve Bank (SARB), on Thursday, July 23, said the committee decided to keep the policy rate unchanged, at 7%, with the prime lending rate at 10.5%.
“Four members preferred a hold, while two favoured an increase of 25 basis points. The committee agreed that the outlook is uncertain, and with the rate increase at our previous meeting, the policy stance is appropriate for now, with rates somewhat restrictive,” Kganyago said.
The decision by the Reserve Bank to keep interest rates unchanged offers some short-term relief to homeowners and prospective buyers, says Adrian Goslett, CEO and regional director of REMAX Southern Africa.
"Many homeowners and prospective buyers will undoubtedly welcome the decision to leave interest rates unchanged. 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."
The decision comes against a backdrop of continued global uncertainty, with geopolitical tensions continuing to impact the global economy. While these factors continue to contribute towards inflationary risks, the SARB appears to have concluded that current conditions do not yet warrant further monetary tightening.
"Opting to keep interest rates unchanged suggests that the Reserve Bank 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,” explains Goslett.
For prospective buyers, the decision means borrowing costs remain unchanged, allowing them to continue planning with greater confidence. However, Goslett cautions buyers against assuming that interest rates will remain at current levels indefinitely.
"Anyone looking to purchase property should continue buying within their means and ensure that they leave enough room in their budget for unexpected expenses or future interest rate movements."
He adds that existing homeowners should use this period of stability to strengthen their financial position where possible.
"If your budget allows, consider paying a little extra into your home loan each month. Even small additional repayments can make a meaningful difference while also creating a buffer should borrowing costs increase in future."
"Interest rate cycles are temporary, but property ownership is a long-term investment. Whether rates move up, down or remain unchanged, buyers who purchase within their means and focus on their long-term financial goals are generally well positioned to benefit over time,” Goslett says.
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, says Stephan Potgieter, CEO of BetterHome Group Mortgage Origination and BetterBond.
He says with renewed tensions in the Middle East creating uncertainty around the global inflation outlook, holding rates unchanged allows the MPC more time to assess whether these risks will filter through to the local economy.
For homeowners, an unchanged prime lending rate means monthly bond repayments remain stable, providing welcome certainty at a time when households continue to face rising electricity and living costs.
Those who are able should consider paying a little extra into their bond each month, helping to reduce interest costs over the long term while creating a buffer against any future rate increases.
Today’s decision to leave the interest repo rate at 7% despite rising tensions in the Middle East and a strong possibility of increased inflation is good news for both residential property buyers and sellers, according to Tyson Properties.
This latest announcement by the Reserve Bank Monetary Policy Committee marks a welcome reprieve for property owners, says Daniela Du Plessis of Tyson Properties.
She says she expects the downward rate-cutting cycle to resume and even catch up with the continued levels in place at the end of 2025 just 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 elevate default risks, Du Plessis admits.
She says the lower to middle segments of the property market will feel a future rate hike the most, with many buyers expected to downsize expectations or choose to rent instead of buy during this waiting period.
She says that those buying to rent are now more vulnerable to payment defaults as tenants struggle to navigate the impact of higher inflation on disposable incomes.
According to the Betterbond Index, although the May interest rate hike did see a slight drop in loan applications during the second quarter of 2026, they remain 5.7% higher than two years ago.
Average home prices continued to increase in both nominal and real terms during Q2. Buyers recorded nominal growth of 8.4%.
This has outperformed inflation by a considerable margin and is likely to hold steady in the wake of ongoing optimism that a renewed ceasefire in the Middle East will eventually emerge.