Editor

The South African Reserve Bank’s Monetary Policy Committee (MPC) announced its decision to keep interest rates unchanged, leaving the repo rate at 7% and the prime lending rate at 10.5%. This move, while widely expected, has been met with a mix of relief and frustration from the property sector.

Local property experts were hoping for a more accommodating stance to boost the economy. As Adrian Goslett, regional director and CEO of RE/MAX Southern Africa, commented, “While we understand the SARB’s need to act cautiously in the face of global uncertainty, today’s decision is likely to come as a disappointment to many South Africans who were hoping for some financial relief. Consumer budgets are still stretched owing to slow economic growth. Even a small rate cut could have provided a welcome buffer for homeowners and potential buyers alike.”

Silvana Dos Reis Marques, principal of Leapfrog Property Group Pretoria East, shares that, “Bond repayments remain steep, and first-time buyers—typically young professionals —are finding it increasingly difficult to enter the property market due to not qualifying for a home loan, pushing them, or keeping them, in the rental market instead. Sellers are also feeling the pinch; many are obliged to adjust expectations, as longer selling times and sluggish demand remain the norm”.

The decision comes despite a positive drop in South Africa’s headline inflation to 3.3% in August. This figure, along with the recent US Federal Reserve rate cut, had fuelled speculation that the MPC might lower the repo rate. However, with inflation expected to tick up again and the SARB’s long-term sights set on a new 3% inflation target, caution prevailed.