Repo Rate on Hold: Industry reacts to SARB’s cautious call

• Reserve Bank holds repo at 6.75%, frustrating expectations of further near-term relief for consumers and property buyers.
• Industry sees scope for cuts in 2026 as inflation, rand strength and oil prices support a softer rate outlook.
• Property demand remains resilient, but affordability and volumes need lower rates to unlock stronger growth.

SARB keeps rates unchanged

‍The South African Reserve Bank (SARB) has opted to leave the repo rate unchanged at 6.75%, keeping the prime lending rate steady at 10.25%.

While inflation remains contained and key economic indicators have improved, the Monetary Policy Committee (MPC) adopted a cautious stance amid global uncertainty, disappointing households and property market participants who had hoped for further easing at the start of 2026.

Industry Response

Samuel Seeff - Chairman, Seeff Property Group
Seeff described the decision as a “missed opportunity,” arguing that domestic conditions clearly supported a cut. With South Africa off the grey list, the rand trading below R16/$, inflation near two-decade lows, and oil prices sharply lower, he believes the Bank had room to act.

Transaction volumes remain 26.5% below 2021 levels, and interest rates are still well above pre-pandemic norms. Seeff urged the MPC to deliver at least two 25bp cuts in the first half of the year, warning that delaying relief risks keeping policy unnecessarily restrictive and constraining growth and employment.

Dr Andrew Golding - CEO, Pam Golding Properties
Golding says the hold reflects caution rather than a negative outlook. With inflation still contained and fuel prices easing, he believes there is scope for up to two rate cuts later in 2026. Housing demand remains steady, stock is tight in key nodes, and investor interest is returning, particularly in the buy-to-let market.

While Cape Town continues to lead, improving affordability should broaden activity across metros and price bands, supporting both first-time buyers and value-driven suburbs.

Greg Dart - Director, High Street Auctions
Dart says the rate hold does not detract from a far more investor-friendly environment. Improved macro stability, grey-list removal, a stronger rand, and reform signals from SARB and National Treasury are restoring confidence.

Of particular significance is the potential restructuring of the prime rate, which could introduce more transparent, market-driven pricing and intensify competition between lenders, especially in commercial and industrial property. He believes these shifts will expand the investor pool and support stronger auction activity as capital costs ease.

Bradd Bendall, National Head of Sales, BetterBond
Despite expectations of further relief, the Reserve Bank’s decision to hold the repo rate steady reflects a cautious start to the year. The positive backdrop of a strong rand and the lowest average inflation in 21 years suggested room for another cut. However, the cumulative 150 basis points of easing since September 2024 has already created a more supportive lending environment.

BetterBond’s January data shows home loan applications up 8.9% year-on-year, while the average deposit required from first-time buyers has dropped 15%, stimulating renewed demand. With inflation near the 3% target and currency stability holding, conditions remain favourable for further rate cuts in the months ahead.

Gavin Lomberg - CEO, ooba Home Loans
Lomberg notes that while a cut was widely expected, stability itself is supportive. Since the easing cycle began, the prime rate is already 150bps lower, significantly improving affordability.

He highlights that average effective mortgage rates have dropped from about 11.2% in late 2024 to below 9.6%, reducing monthly repayments by over R1,400 on a typical bond. With a resilient rand and softening inflation outlook, he expects further cuts later in the year, which would continue to stimulate buyer confidence and lending activity.

Chris Tyson - CEO, Tyson Properties
Tyson believes the pause was expected and remains confident that a 25bp cut could come as early as March. He highlights the Reserve Bank’s exploration of reforming the prime rate as a potential game-changer that could enhance competition and borrower bargaining power.

While scrapping prime alone may not immediately reduce debt costs, the real catalyst will be further inflation-driven rate cuts later in the year. Lower rates, he says, will reignite demand, support first-time buyers, and encourage existing homeowners to upgrade, downsize, or relocate.‍

Outlook and Way Forward

‍While the MPC chose caution, the consensus across the property and finance sectors is that the direction of travel remains downward. Inflation is contained, the rand is resilient, and economic fundamentals are improving.

Most industry leaders expect further easing in the months ahead, which should translate into better affordability, stronger transaction volumes, and renewed investor confidence. For the property market, the message is clear: stability is welcome, but meaningful growth will require the Reserve Bank to begin cutting rates again and soon.

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