Path Down Remains on Pause

For homeowners hoping July might bring some relief, the wait goes on. The South African Reserve Bank held rates steady, keeping the repo rate at 7% and prime – the rate that sets most home loan repayments – at 10.50%.

According to Craig Mott, National Sales Manager for the Rawson Property Group, a cut was always a long shot with global conditions in turmoil.

“For now, a hold is about the best we could realistically hope for,” he says, “and I think we need to prepare ourselves for that to remain the case through to year-end.”
What the hold means for the market

While a hold was certainly not what the market hoped for, Mott says it’s not altogether a bad thing.

“What hurts the market isn’t a particular rate, it’s uncertainty,” he explains. “When people don’t know what’s coming, they wait. A steady hand from the Reserve Bank, even at a slightly higher level, gives everyone room to make decisions again.”

Why the Bank held

According to Leonard Kondowe, National Manager for Rawson Finance, the cause of the recent pressure is largely beyond the country’s borders.

“Inflation has picked up since the start of the year, largely on fuel and global pressures rather than anything in the local economy,” he explains. “The Bank moved in May to get ahead of it, and holding now buys time to see whether those pressures ease.”

That distinction matters for anyone watching for the next move. Because the pressure is coming from fuel and global tension rather than the local economy, the thing to watch isn’t South African growth or spending – it’s whether those outside forces settle. If fuel softens over the coming months, the door to a cut opens later in the year.

For buyers and sellers

For buyers, a stable rate is a chance to plan rather than a reason to pause. Kondowe’s advice hasn’t changed with the cycle: get your finances in order, and don’t gamble on the timing of the next move.

“Stress-test your bond at today’s rate, not the rate you’re hoping for,” he says. “If the repayment is comfortable now, you’re in a strong position whatever the Bank does next. Prequalification is still the best first step – it tells you exactly where you stand.”

Mott adds that waiting for cuts that may be months away is rarely the win buyers imagine. “The right home at an affordable repayment beats a perfect interest rate on a home you missed,” he says.

For sellers, on the other hand, a steady rate environment works in their favour, because buyers who can plan are buyers who commit. The fundamentals still apply: price realistically and present the property well, and a stable market does the rest.

The rental market holds firm

The rental market has been one of the steadier corners of property through the rate swings, and Jacqui Savage, National Rentals Manager for the Rawson Property Group, expects that to continue.

“Higher borrowing costs tend to keep some would-be buyers renting for longer, and that supports demand,” she says. “We’ve seen rentals stay resilient, particularly in well-connected areas where people want to live and work.”

That resilience comes with a caveat. Affordability is under pressure for tenants too, and Savage says careful vetting matters more than ever.

“Demand is healthy, but so is the need for diligence,” she notes. “Thorough screening protects both the landlord and the tenant, and it’s the single best way to avoid problems down the line.”

Looking ahead

With July settled, attention turns to whether the Bank can begin easing again before the year is out – a question that rests largely on fuel and global conditions. Mott’s view is that the next decision shouldn’t dominate anyone’s thinking.

“A single rate decision is rarely the thing that makes or breaks a property move,” he says. “What matters is buying within your means, in the right place, for the right reasons. Get those right and you can weather whatever the Bank decides – this month or any other.”

It’s a steadying note on which to enter the second half of the year. The easing cycle may have stalled, but the case for acting on solid fundamentals hasn’t moved at all.