To achieve sustainable growth, several factors will be required: lower inflation, stronger economic expansion, enhanced infrastructure reliability, heightened investor confidence, and increased household incomes.
Image: Neo Ntsoma
South Africa’s property sector still has an opportunity to consolidate and plan with greater certainty, while recognising that the broader economic environment remains challenging and that resilience will continue to be essential.
On Thursday, Lesetja Kganyago, the Governor at the South African Reserve Bank (SARB), said the Monetary Policy Committee (MPC) decided to keep the policy rate unchanged, at 7%, and the prime at 10.50%.
The decision by the South African Reserve Bank to keep the repo rate unchanged at 7.0% strikes a careful balance between managing inflation risks and supporting an economy that continues to face weak growth, says Maphefo Sipula, the head of research and impact at Property Point.
She says while inflation accelerated to 5.0% in June, maintaining the current rate provides households, businesses and the property sector with some much-needed certainty after the May increase.
“Although the decision offers short-term relief, it should not be interpreted as an indication that the interest-rate cycle has turned. The MPC remains data-dependent, and future decisions will continue to be guided by inflation trends, global economic developments and domestic growth conditions,” Sipula says.
According to Property Point, keeping the repo rate unchanged provides welcome stability for the property sector:
However, borrowing costs remain high by historical standards, meaning project feasibility, investment decisions and access to finance will continue to require careful management.
Going forward, Sipula says the sector's recovery will depend on more than interest rates alone. She says sustainable growth will require lower inflation, stronger economic growth, improved infrastructure reliability, increased investor confidence and higher household incomes.
“While the hold is positive for market confidence, affordability challenges remain.”
The MPC’s July decision provides stability, but it should not encourage complacency, Property Point says. It warned that interest rates remain elevated, and households and businesses should continue making financial decisions based on affordability rather than expectations of imminent rate cuts.
“Potential homeowners should ensure they have sufficient financial buffers before taking on new debt, while existing homeowners should continue prioritising sound financial planning and debt management.
"Property investors should maintain a long-term perspective, focusing on well-located assets with sustainable rental demand rather than short-term market movements. Developers should continue exercising prudent financial management, carefully evaluating project viability and maintaining disciplined borrowing strategies."
This week's decision to keep interest rates unchanged provides something the property market values highly: stability, said Richard Malyon, CEO at Fine & Country South Africa.
He says that certainty gives buyers confidence to plan and sellers confidence to enter the market knowing the landscape remains familiar.
“The best property decisions have never been driven by a single Monetary Policy Committee announcement.
"They're driven by timing, preparation and expert guidance. Whether you're buying your next home, investing or preparing to sell, today's announcement reinforces the importance of focusing on your personal goals rather than reacting to short-term headlines.
"Markets evolve. Opportunities remain. And with the right advice, confidence follows, ” Malyon said.