Interest rates impact homebuyers as confidence returns in South Africa

Remax Southern Africa stated that interest rates are still affecting homebuyers in 2026, but buyer confidence is slowly coming back as the market becomes more stable and lending conditions improve.

Remax said that interest rates remain an important consideration for homebuyers in 2026.

“In January this year, the South African Reserve Bank (SARB) opted to keep the repo rate unchanged, following a series of cuts over the past year that eased borrowing conditions from the peaks seen in 2023 and 2024,” it said.

Adrian Goslett, the CEO and Regional Director of REMAX Southern Africa, said that while the interest rate environment has improved, borrowing costs continue to shape buyer confidence. “Although interest rates have come down from their peak, they are still high enough to influence buyer decision-making as buyers today are far more cautious. They want certainty that their monthly repayments will remain affordable.”

Goslett added that despite this caution, there are encouraging signs that buyer confidence is gradually returning as conditions stabilise and buyers are becoming more financially prepared. “We’re slowly starting to see more momentum in the market as interest rates become less of a dominant obstacle than they once were. Buyers who are better positioned financially are beginning to re-engage more actively.”

Remax said that according to BetterBond’s Property Brief for February 2026, home loan applications in January were 2.8% higher compared to January 2025 and 10.4% above January 2024 levels, signalling a steady recovery in buyer activity after the traditional year-end slowdown.

Remax added that the report also shows that lending conditions are improving, with the national home loan approval ratio rising to 63.5%, reflecting stronger confidence from financial institutions. “House prices are also increasing at a moderate yet sustainable pace. BetterBond reports that average house prices for all buyers rose by 4.1% in January 2026. First-time buyer price growth was more contained at 1% year-on-year, suggesting that entry-level segments remain relatively accessible.”

Remax said that growing buyer confidence is also reflected within the REMAX SA network. “Looking at their results from 2025, the brand’s reported sales increased by 18% year-on-year, while monthly registered sales rose by 14%. The average selling price across the network showed steady growth, increasing to R1 920 976 in 2025 from R1 836 183 in 2024.”

Remax added that looking ahead, there is growing optimism among industry commentators and economists that the current rate cycle may still offer some relief. “Based on prevailing economic forecasts and moderating inflation trends, there is a reasonable expectation that South Africa could see up to two modest interest rate cuts later this year. While the current environment may still cause some buyers to delay their purchasing decisions, those who choose to enter the market now could be well positioned to benefit from improved affordability and stronger market momentum should further rate reductions materialise.”

Goslett added that while interest rates are still a consideration for many homebuyers, they are no longer the primary force holding the market back.

“As stability returns and lending conditions continue to improve, we can expect buyer activity to strengthen steadily,” he said.

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