SARB holds rates steady as property market stays resilient

• SARB keeps the repo rate at 7.0%, leaving prime lending rate unchanged at 10.5%.
• Industry leaders say stability provides welcome certainty despite rising global inflationary pressures.
• Residential property fundamentals remain resilient, supported by strong buyer demand and competitive lending.

The South African Reserve Bank (SARB) has opted to leave the repo rate unchanged at 7.0%, keeping the prime lending rate at 10.5%, providing welcome stability for homeowners, buyers and investors navigating an increasingly uncertain global economic environment.

The Monetary Policy Committee's (MPC) decision follows its unexpected 25 basis point increase in May, reflecting a cautious approach as policymakers weigh persistent inflationary risks against slowing domestic economic growth.

The decision comes against a backdrop of subdued economic activity, renewed geopolitical tensions in the Middle East, oil prices hovering near US$100 a barrel, a weaker global outlook and South Africa's June inflation rate rising to 5.0%, reinforcing concerns that inflationary pressures remain stubborn despite easing over much of the past year.

For the property sector, however, today's announcement offers something the market values highly, certainty.

Industry leaders believe maintaining current borrowing costs will help preserve confidence, sustain housing demand and allow buyers and investors to continue making informed long-term decisions.

Industry Weighs In

Rhys Dyer, CEO, ooba Group

‍"The SARB has struck the right balance. In an environment of heightened global uncertainty and persistent inflation risks, stable interest rates provide much-needed confidence for homebuyers and homeowners. South Africa's housing market continues to demonstrate remarkable resilience, supported by competitive lending, high loan-to-value offerings and strong demand from first-time buyers despite challenging economic conditions."

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Dr Andrew Golding, CE, Pam Golding Property Group

"The decision offers welcome relief for indebted consumers and prospective homebuyers alike. While inflation risks remain elevated, maintaining the current rate provides breathing room for households while supporting confidence in the residential property market. Encouragingly, national house price inflation has strengthened to 5.1%, its strongest performance since 2021, highlighting the sector's resilience."

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Samuel Seeff, Chairman, Seeff Property Group

"Holding the repo rate steady was the right decision. Consumers are already under considerable pressure from rising fuel costs, electricity tariffs and broader living expenses. Stability avoids placing further strain on households while supporting economic recovery. The property market remains fundamentally healthy, with favourable lending conditions and improving activity creating opportunities for buyers and sellers."

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Stephan Potgieter, CEO, BetterBond‍

"Today's decision reflects the Reserve Bank's cautious response to heightened global uncertainty. For homeowners, unchanged borrowing costs provide welcome certainty at a time when household budgets remain under pressure. Buyers should continue planning around today's affordability levels while, where possible, paying a little extra into their home loans to reduce future interest costs."

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Harry Scherzer, CEO, Future Forex

"The hold was largely anticipated, but the real story lies beyond today's decision. Inflation remains above target, geopolitical tensions continue to influence oil prices and the rand remains exposed to global developments. The SARB is buying time rather than declaring victory, and future decisions will largely depend on how international inflationary pressures evolve."

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Daniela Du Plessis, Tyson Properties

"The decision provides welcome relief following May's rate increase and should help steady the residential market. While another rate increase cannot be ruled out if inflation accelerates further, today's pause allows buyers and sellers to regain confidence. Property fundamentals remain positive, supported by continued house price growth and resilient buyer demand."

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Craig Mott, NSM, Rawson Property Group‍

"What hurts the property market most isn't higher interest rates, it's uncertainty. A steady hand from the Reserve Bank allows buyers, sellers and investors to plan with greater confidence. Those waiting for the perfect interest rate may miss the right property opportunity. Sound fundamentals remain far more important than trying to perfectly time the market."

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Housing market continues to show strength‍

Despite global uncertainty and tighter monetary conditions, South Africa's residential property market continues to outperform expectations.

Recent data points to a market supported by improving buyer confidence, competitive lending conditions and growing capital appreciation.

Among the key indicators:

• National house price inflation accelerated to 5.1% in June, the strongest annual growth since 2021.
• The Western Cape continues to lead the country, recording average house price inflation of 10.3% during the first half of 2026.
• Cape Town remains South Africa's strongest-performing metro, with house prices increasing by 11.1%.
• First-time buyers accounted for almost 48% of all home loan applications during the first six months of the year.
• Banks continue supporting affordability, with 83.9% of home loan applications approved nationally.
• Applications for 100% home loans reached 56.9%, highlighting lenders' continued willingness to assist cash-constrained buyers.

Together, these indicators suggest the underlying fundamentals of South Africa's residential property market remain intact despite global economic headwinds.

Looking Ahead

While policymakers remain alert to inflationary risks stemming from higher fuel prices, geopolitical tensions and global market volatility, today's decision provides much-needed stability for households and the broader property sector.

Most industry commentators agree that the rate-hiking cycle has likely paused, although any return to interest rate cuts will depend on inflation moderating over coming months and global conditions improving.

For now, buyers, sellers and investors can plan with greater certainty, supported by resilient market fundamentals, competitive lending conditions and steady house price growth.

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