The South African Reserve Bank’s Monetary Policy Committee (MPC) has once again opted for caution, holding the repo rate at 7.00%. Prime stays unchanged at 10.50%, offering no new relief – but no fresh pressure either – for homeowners and buyers.
This was no easy decision. Inflation eased to ~3.3% in August, its lowest in three months, and firmly within the target band. But while that eased affordability, it wasn’t enough to trigger a cut. SARB’s message is clear: more evidence is needed before shifting gears.
Why the pause – and what it signals
Two forces shaped this decision. First, falling inflation gives the SARB room to watch for further softening in price pressures. The Bank continues to anchor long-term inflation expectations closer to 3%, which helps build investor confidence, but it also argues for restraint.
Second, real GDP growth in the second quarter came in at 0.8%, surprising analysts. That has led SARB to revise its forecast for 2025 growth upward from 0.9% to 1.2%.
The hope is that this hold keeps the door open for cuts later in the year – without risking fresh currency pressure or re-igniting inflation. However, the Bank warned that it expects inflation to creep up in the coming months, influenced by higher electricity costs and other administered price pressures.
Property owners and buyers would be wise to take advantage of this pause to strengthen their financial position and prepare for potential shifts ahead.
For homeowners: now’s your window
If you’re already in the market with a variable-rate bond, your debit order stays the same for now. But this is not a time for complacency. Use the current stability to shore up your finances.
Avoid increasing short-term debt during this period of apparent calm. In fact, build in a buffer – one percentage point above your current repayment, if possible – so you’re not caught off guard if rates shift again. Even small extra payments each month can shave years off your bond and build long-term resilience..
Also ask your bank or bond originator whether your interest rate margin can be reviewed, especially if your risk profile has improved. A small adjustment compounds to big savings over time.
For buyers: clarity supports confidence
Stable rates help buyers plan and act. Home-loan activity has been picking up. According to BetterBond’s latest brief, bond applications were up 14% quarter-on-quarter and 12% year-on-year in July – reaching levels last seen in late 2022.
The average purchase price nudged above R1.6 million, with first-time buyers averaging around R1.3 million. That suggests cautious optimism is returning, especially in the middle of the market.
Deposit patterns back this up. Average deposits rose mid-year, both among first-time buyers and across the broader market. This shows that households are prioritising clean credit and solid savings – behaviour that lenders reward with better pricing.
We’re also seeing a shift in loan sizes. Applications over R3 million have grown, while volumes in the lowest-price segments have tapered. The most active bracket remains the mid-market – especially among buyers in their 30s and 40s, where average purchase prices are climbing.
Sellers who recognise this dynamic – and price realistically – are the ones concluding sales. Those chasing last year’s highs are still sitting.
What smart buyers and investors should do now
This is a window for preparation, not celebration.
If you’re buying your first home, pay down revolving debt. Save towards a deposit – 10% remains a powerful signal to lenders. Make sure your income is clearly documented and get prequalified before you start viewing.
Use this simple yardstick: On a R1.6 million bond over 20 years at prime, a 25 basis point move changes your repayment by about R270/month. A 50bp change = R540. A full percentage point = R1,060. Stress-test your affordability now – not after rates move.
If you’re investing, don’t over-leverage in the hope of a rate cut later this year. Test your deal at current rates. Ensure the rent covers the bond, levies and rates, with a reserve for maintenance and vacancies.
There are opportunities where listings have lingered or where light renovations can boost returns. In suburbs seeing more additions and alterations, stock may tighten, supporting well-priced homes.
My view
Stability isn’t the finish line. It’s a planning window. Whether you’re buying your first home or looking to expand your portfolio, this is the time to plan smart, act confidently, and be offer-ready when the right opportunity appears.
