{"id":837910,"date":"2025-09-18T16:28:59","date_gmt":"2025-09-18T14:28:59","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=837910"},"modified":"2025-09-18T16:29:10","modified_gmt":"2025-09-18T14:29:10","slug":"tough-break-for-homeowners-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/837910\/tough-break-for-homeowners-in-south-africa\/","title":{"rendered":"Tough break for homeowners in South Africa"},"content":{"rendered":"\n

South Africa’s property market says the Reserve Bank’s latest decision to hold interest rates is another missed opportunity from the central bank to bring relief to bondholders and to boost the economy.<\/p>\n\n\n\n

The SARB’s Monetary Policy Committee (MPC) voted on Thursday to keep the repo rate at 7.00%, with the prime lending rate at 10.50%.<\/p>\n\n\n\n

While not unexpected\u2014as economists and analysts had generally anticipated a hold\u2014there was a growing call for another 25 basis point cut at least, following positive indicators.<\/p>\n\n\n\n

This included unexpectedly low inflation at 3.3% in August, a strengthening rand amid dollar weakness, and the US Fed also cutting rates this week.<\/p>\n\n\n\n

Rhys Dyer, CEO of the ooba Group, said the hold was disappointing, given that South African consumer confidence is still low as households remain under pressure.<\/p>\n\n\n\n

Samuel Seeff, chairman of the Seeff Property Group, said that it was a missed opportunity for the Reserve Bank to boost the economy and economic activity.<\/p>\n\n\n\n

“There was adequate reason to provide at least a 25-basis point cut, and we believe further rate cuts are needed to take the rate back to the pre-pandemic level,” he said.<\/p>\n\n\n\n

Seeff noted that while recent rate cuts have brought relief, the effect on the broader economy has been negligible, evident in the low economic growth rate of just 0.8% in the second quarter. <\/p>\n\n\n\n

He added that the decision is also out of tune with inflation.<\/p>\n\n\n\n

“Despite inflation being lower than it was before the pandemic, the interest rate remains higher. This must be addressed to stimulate growth and create much-needed jobs,” he said.<\/p>\n\n\n\n

According to Reserve Bank governor Lesetja Kganyago, the reason the MPC elected to hold rates was because of the longer-term risks to inflation.<\/p>\n\n\n\n

The SARB’s move to “prefer” and eventually target a 3% inflation rate also means that what is currently seen as low inflation is still higher and trending upward relative to that baseline.<\/p>\n\n\n\n

Some good news may still be coming<\/h2>\n\n\n\n
\"\"<\/a>
Andrew Golding<\/figcaption><\/figure>\n\n\n\n

With rates unchanged, bondholders and households in debt will be disappointed to miss out on a reprieve\u2014but there is hope that one may still be coming.<\/p>\n\n\n\n

Ooba’s Dyer said that the latest announcement should be seen as a “pause” or a “recalibration” rather than an end to South Africa’s rate-cutting cycle.<\/p>\n\n\n\n

Dr Andrew Golding, chief executive of the Pam Golding Property group, shared a similar sentiment, saying that, were it not for the Reserve Bank\u2019s focus on the lower end of the 3\u20136% inflation target band, local conditions appeared favourable for an additional rate cut. <\/p>\n\n\n\n

Crucially, should these conditions persist and continue to surprise positively, more interest rate cuts could still be on the cards, he said.<\/p>\n\n\n\n

“We are hopeful that the latest decision represents only a temporary pause in South Africa\u2019s interest rate easing cycle, with the prospect of further cuts either later in 2025 or during 2026,” he said.<\/p>\n\n\n\n

Indeed, ahead of the announcement, some economists, like Investec chief economist Annabel Bishop, noted that a 25 basis point cut is still highly likely in 2025.<\/p>\n\n\n\n

If not in September, then in November. More could follow in 2026.<\/p>\n\n\n\n

The SARB itself noted that the latest move was a pause to see how the 125 basis point cuts since September 2024 “is affecting the economy, how expectations evolve, and how inflation risks are resolved”.<\/p>\n\n\n\n

However, this comes with the caveat that more cuts are not guaranteed, and not all analysts are of the same view. <\/p>\n\n\n\n

Absa economists, for instance, predicted the hold for September, but also projected a longer-term hold through to 2027.<\/p>\n\n\n\n

This means that South Africans should also factor in the possibility that there won’t be any meaningful rate cuts for a prolonged period.<\/p>\n\n\n\n

According to Chris Tyson, CEO of Tyson Properties, in this scenario, consumers and property owners in particular need to hunker down.<\/p>\n\n\n\n

He said that South Africans should budget wisely and repay mortgages at an existing slightly higher level whenever possible to reduce the overall repayment period.<\/p>\n\n\n\n

In a high-interest-rate environment, the key is to get rid of debt as quickly as possible.<\/p>\n\n\n\n

“Try to keep your repayments on loans at current levels if you can. That will enable you to pay off your home loan faster and become less vulnerable to future rate hikes,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s property market says the Reserve Bank’s latest decision to hold interest rates is another missed opportunity from the central bank to bring relief to bondholders and to boost the economy.<\/p>\n","protected":false},"author":10,"featured_media":799688,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[5829,10618,10773,16930],"class_list":["post-837910","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-ooba","tag-pam-golding","tag-seeff","tag-tyson-properties"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=837910"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837910\/revisions"}],"predecessor-version":[{"id":837913,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837910\/revisions\/837913"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/799688"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=837910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=837910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=837910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}