Property sector hails interest rate cut as boost for buyers and market confidence

The property industry has welcomed the South African Reserve Bank’s (Sarb) decision to lower interest rates by 25 basis points, a move expected to ease pressure on consumers and stimulate activity in the residential market.

The rate cut, announced by Governor Lesetja Kganyago on Thursday following this week's Monetary Policy Committee meeting, reduces the repo rate to 6.75% and the prime lending rate to 10.25%.

Kganyago said the decision was unanimous, marking the latest step in a gradual easing cycle as inflation trends lower and economic conditions stabilise.

The savings on the monthly repayment on a R1 million home loan (over 20-years) is now down by over R1 000 compared to mid-2024.

Seeff Property Group chairman, Samuel Seeff, on Thursday said the cut brings “welcome news and early festive cheer” for households, the economy and the property sector.

Seeff noted that inflation, averaging just under 3.3% this year, remains well within the Sarb’s proposed new 2–4% target band, while the rand has held firm below R18 to the US dollar.

These positive economic indicators, he said, set the stage for stronger demand in a market that has been slow to recover despite several rate cuts since late 2024.

“The cut will further lower the cost of home loans, and improve property affordability, a great incentive to attract more buyers to the market,” said Seeff.

Pam Golding Property CEO, Dr Andrew Golding said the combination of a positive Medium-Term Budget Policy Statement and the latest rate cut is likely to lift consumer confidence.

He said interest rate cuts typically take two to three months to filter through to market activity, but the expectation of another reduction in early 2026, along with the possibility that Treasury may avoid a R20 billion tax increase, bodes well for a rebound in residential sales next year.

Golding added that younger buyers are driving momentum in the market. According to ooba Home Loans data, first-time buyers made up 47.9% of national applications in October 2025, with even higher shares recorded in Johannesburg (51.7%) and the Free State (60.3%).

“According to ooba Home Loans, first-time buyers accounted for 47.9% of all national applications in October 2025. In Johannesburg, this figure rises to 51.7%, while in the Free State first-time buyers represent an impressive 60.3% of all applications this year,” Golding said.

“Positively, housing activity in general has strengthened across the residential markets of Johannesburg, Pretoria and KwaZulu-Natal, while Cape Town and the Garden Route continue to deliver consistently robust performance.”

Golding also welcomed Treasury’s adoption of the new 3% inflation target, saying it would help anchor long-term inflation expectations.

“With the government now using the lower inflation assumption in its budgeting, it becomes easier for the Sarb to anchor inflation expectations around the new 3% target,” he said.

RE/MAX Southern Africa CEO, Adrian Goslett, said the Sarb’s decision reflects a more supportive approach to economic recovery and is expected to bolster buyer confidence.

“The decision...is a favourable approach to aid in financial relief for many South Africans. As a result of stagnant economic growth, this small rate cut can provide a financial buffer for homeowners and prospective buyers across the country,” he said.

Goslett added that the shift from the bank’s cautious tone in September to a more accommodative stance in November shows growing confidence that the domestic economy is gradually moving past external risks and tax pressures.

“This move suggests increasing faith that the domestic economy is slowly relieving itself from external risks, including unpredictability in the global market and local tax pressures, to permit modest monetary support,” he said.

BetterBond national head of sales, Bradd Bendall said the interest rate cut will offer immediate relief to households heading into the festive season.

“BetterBond’s latest data points to a residential property market that is steadily gaining momentum. Home loan applications have increased by 30% since the third quarter of 2023 - the highest level since early 2022,” Bendall said.

“The proportion of home loans granted to first-time buyers is 17.4% higher year-on-year, an important indicator of market recovery.”

BUSINESS REPORT