Interest rate cut offers welcome relief - But property industry calls for bolder action

There was encouraging news for homeowners and investors this week as the South African Reserve Bank’s Monetary Policy Committee (MPC) announced a 25 basis point cut, bringing the repo rate down to 7.25%  - a level last seen in January 2023. The prime lending rate now sits at 10.75%, translating to a monthly saving of around R350 on a R2 million home loan.

While many in the industry had hoped for a deeper 0.50% reduction, the consensus is that this move is a positive step toward restoring market confidence, easing pressure on consumers, and stimulating real estate activity. Property leaders welcomed the cut but stressed that more aggressive action is needed to drive real growth and unlock broader economic recovery.

We round up expert insights from across the real estate sector below.

Seeff: Rate cut offers relief, but bolder action needed

Samuel Seeff, chairman of the Seeff Property Group, welcomed the Reserve Bank’s 25bps interest rate cut but believes it fell short of the bold action needed to revitalise the economy.

While the repo rate now sits at 7.25% and the prime rate at 10.75%, Seeff argues a 50bps cut would have made a more meaningful impact, especially with inflation at a low 2.8%, well below the SARB’s target.

He emphasised that South Africa urgently needs economic growth and job creation, and that reducing borrowing costs is vital to putting more money into consumers' hands. The property market remains below pre-Covid levels, with Q1 2025 sales volumes down 10% year-on-year.

Still, the cut offers improved affordability for buyers and supports first-time homeownership. With mortgage savings ranging from R127 to R848 depending on loan size, Seeff says the current environment remains favourable, especially where housing stock is tightening and prices are firming.

Landsdowne Property Group: Welcomes Rate Cut

Jonathan Kohler, CEO of Landsdowne Property Group, applauds the Reserve Bank’s 25bps interest rate cut, saying it delivers timely relief for homebuyers and investors while reinforcing stability in South Africa’s residential property market.

Kohler believes the cut improves affordability, especially for buyers in the R800,000 - R2 million bracket, with lower monthly repayments creating more access to property ownership. For example, repayments on a R1 million bond have dropped from R10,837 to R10,152 since the rate cuts began, saving homeowners R685 per month.

He highlights that the scrapping of the VAT hike also boosts disposable income, enhancing buying appetite. With banks increasingly granting 100% bonds, conditions remain favourable -particularly in high-demand growth areas like Midrand, Fourways, and Soweto.

For developers and investors, the cut provides clarity and pricing confidence. Kohler says secure, well-located rental properties continue to perform well, and while future rate cuts are uncertain, the sector is poised for renewed momentum.

RE/MAX: Rate cut brings well-timed relief for Homebuyers

RE/MAX of Southern Africa CEO Adrian Goslett welcomed the Reserve Bank’s 25bps interest rate cut, calling it a “well-timed and meaningful win” for consumers and the property market. The decision, which lowers the repo rate to 7.25% and the prime rate to 10.75%, comes amid historically low inflation and sluggish economic growth.

Goslett believes the reduction will unlock buyer confidence, especially among first-time buyers and middle-income earners, while also supporting broader market activity. Lower monthly repayments increase affordability and could help stimulate quicker sales and more competitive offers for sellers.

Importantly, he adds that the rate cut signals the Reserve Bank’s willingness to adopt a supportive stance without compromising its inflation target, boosting both investor sentiment and market resilience.

RE/MAX encourages buyers and sellers to act strategically during this window of opportunity, as this cautious but optimistic move aims to restore domestic demand and consumer confidence.

Pam Golding Property Group welcomes interest rate relief

Dr. Andrew Golding, CEO of the Pam Golding Property Group, welcomed the Reserve Bank’s decision to cut interest rates by 25 basis points, reducing the repo rate to 7.25% and the prime lending rate to 10.75%.

Golding noted that subdued economic growth, low inflation (2.85% in April), and weak consumer confidence made a compelling case for the cut, offering much-needed relief to homeowners and mortgage applicants.

The move boosts market sentiment, particularly in the residential property sector, where first-time buyer activity has stabilised. Golding highlighted that strong demographic demand from young homebuyers and ongoing migration between provinces are keeping the market resilient.

In the luxury segment, high-end homes remain in demand, as demonstrated by Pam Golding’s R170 million sale in Clifton. While there may be limited room for further cuts if the Reserve Bank adopts a lower inflation target, this rate relief signals renewed optimism for South Africa’s housing market.

Tyson Properties says cut is welcome relief

Tyson Properties CEO Chris Tyson views the recent 0.25% repo rate cut as a welcome relief for homeowners and investors, though he cautions that the current interest rate environment may be the new norm.

While further cuts are possible, Tyson advises budgeting for higher rates to ensure financial stability.

He anticipates that the property market will remain resilient, with potential for growth in key regions like Gauteng and KwaZulu-Natal, despite ongoing economic uncertainties.

BetterBond: Rate cut offers timely relief and much needed investor confidence

Bradd Bendall, National Head of Sales at BetterBond, welcomed the Reserve Bank’s 25 basis point interest rate cut, which lowers the prime lending rate to 10.5%. Aligned with recent moves by the European Central Bank and Bank of England, the decision was widely expected amid declining inflation, now comfortably within the target range.

Bendall said the cut offers measured relief for homeowners and signals a clear intent to stimulate economic activity and investor confidence. Encouragingly, BetterBond has already seen a 2.2% year-on-year increase in home loan applications, suggesting a gradual recovery in the property market.

The rate cut is expected to further support this momentum. However, Bendall advises homeowners to remain cautious and budget responsibly, as global economic uncertainty, driven by international trade tensions and tariff disruptions, could continue to affect local markets.

Rate Cut to Reignite First-Time Buyer Demand: ooba

The South African Reserve Bank’s 25bps interest rate cut is a welcome boost for the residential property market, says Rhys Dyer, CEO of ooba Group. With the repo and prime rates now at 7.25% and 10.75% respectively, Dyer believes this move supports both consumers and the broader industry.

Despite a slight CPI increase to 2.8% in April, inflation remains below the SARB’s target range, while easing fuel prices and a unified Budget signal a positive macro backdrop. The raised transfer duty threshold and unchanged VAT rate also enhance affordability for new buyers.

According to ooba’s data, the national average purchase price rose to R1.67 million in April, while competitive lending (prime less 0.65%) and higher loan-to-value ratios are driving market activity. However, Dyer notes that activity in the rate-sensitive first-time buyer segment has stalled and hopes the latest cut will reignite demand.

He remains optimistic about steady growth ahead.

Rawson Property Group: Cut Reignites Market Confidence

The South African Reserve Bank’s 25bps interest rate cut, bringing the repo rate to 7.25% and prime to 10.75%, is a welcome relief for homeowners and first-time buyers, says Leonard Kondowe, National Manager at Rawson Finance.

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“This reduction eases monthly bond repayments and boosts affordability, especially for new buyers,” he explains. Kondowe encourages homeowners to continue paying at previous rates to reduce interest and build financial resilience.

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With property prices still competitive, Kondowe urges buyers to get prequalified to take advantage of better financing conditions and rising market confidence.

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