Good news for homeowners in South Africa
The Monetary Policy Committee (MPC) has opted to hold interest rates rather than raise them by 25 basis points, giving relief to bonded homeowners in South Africa.
Many experts expected the committee to raise interest rates in response to the announcement that June’s inflation rate reached 5% y/y.
However, the MPC voted 4-2 to hold rates, noting that, outside of fuel inflation, pricing in the country appears contained.
Reserve Bank governor Lesetja Kganyago noted that reduced inflation forecasts played a part in the decision, despite June’s figures being higher than anticipated.
The decision to hold interest rates means that anyone paying off a home loan or looking to get into the property market won’t be facing higher costs.
Pam Golding Property chief executive Andrew Golding said the MPC’s announcement was a welcome relief for many South Africans.
“The MPC’s decision today to leave the repo rate unchanged provides welcome relief for consumers with debt, including mortgage holders, and for prospective home buyers,” he said.
He said South Africans are already struggling with increased costs, including rising municipal tariffs and elevated fuel prices.
“The MPC’s decision recognises the importance of balancing inflation risks with the need to support economic activity and household finances,” he said.
Seeff Property Group chairman Samuel Seeff had a similar view, saying the interest rate hold was a “necessary measure”.
“This is a necessary measure for stability and avoids punishing overburdened consumers and the economy further,” he said.
Lower interest rates encourage consumer spending, helping prevent the economy from stagnating further.
South Africa has seen modest economic growth recently, with GDP growing 1.1% in 2025 and current forecasts for 2026 ranging from 1.0% to 1.4%.
Seeff said the Reserve Bank’s decision was good news for the property market, which has seen an 18% reduction in transactions compared to 2016.
Temporary relief for homeowners
Tyson Properties managing director Daniella du Plessis was hopeful that a rate-cutting cycle would come into effect in the future.
She said South Africa’s interest rates could return to the same levels as at the end of 2025 when global tensions begin to recede.
In December 2025, South Africa’s repo rate was 6.75%, and the prime lending rate was 10.25%—25 basis points below the current rate.
However, Du Plessis warned that before rate cuts could begin, another interest rate increase should be expected.
She said this would be felt the most in the middle and lower segments of the property market, as many people would opt to wait before buying property or choose to rent.
The impact of interest rate decisions has already been seen in the market.
After the MPC’s decision in May, housing loan applications in South Africa fell slightly, but the number was still higher than two years ago, according to the Betterbond index.
Du Plessis said people buying property to rent are in a difficult position, as rising inflation reduces spending power and lowers what people are willing to pay for as renters.
Standard Bank’s head of home services, Toni Anderson, said keeping borrowing rates unchanged would benefit both property owners and buyers.
She said keeping the interest rates stable would give potential homeowners confidence in their buying decisions.
“This hold should support positive momentum in the property market because stable borrowing costs help buyers make purchasing decisions with greater certainty,” she said.
Landsdowne Properties CEO Jonathan Kohler said the interest rate announcement was good news for homeowners but would not provide any real relief.
He said that while bond repayments may not have increased, the rising inflation costs are still taking a heavy toll on many South African households.
He said people should see the hold as an opportunity to stabilise their finances rather than to relax.
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