MAIN IMAGE: Stephen Whitcombe – MD of FIRZT Realty
FIRZT Realty
Growing public interest in interest rate movements makes it important for homebuyers and sellers to understand how these decisions are made and what they could mean for the residential property market as South Africa moves through 2026.
So says Stephen Whitcombe, MD of FIRZT Realty, who explains that interest rates in South Africa are set by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB),
“It is the MPC that meets every two months to assess economic conditions and decide whether interest rates should be increased, decreased or kept unchanged, ahead of the familiar announcements made by the SARB Governor.
“And the committee is made up of six members, including the Governor, three Deputy Governors and two senior Reserve Bank officials. Each member has a vote, and decisions are taken by majority. The Governor has the casting vote in the event of a stalemate.”
What is the MPC’s main purpose?
He says that while the process is thorough and data-driven, its primary objective is straightforward: to keep inflation under control while supporting sustainable economic growth. “It is also important to note that while it has a good relationship with the National Treasury and the Minister of Finance, the SARB is an independent institution, which ensures that its decisions are not politically motivated.
What factors influence interest rate decisions in South Africa?
“When deciding on interest rate changes, the MPC considers factors such as current and expected inflation levels, economic growth trends, employment data, consumer spending, exchange rate movements, global interest rate cycles, oil and food prices and any risks to the country’s financial stability. The committee also closely monitors household debt levels and the overall cost of living, because interest rates have a direct impact on consumers’ monthly expenses.”
Are interest rates expected to fall in 2026?
Many of these factors are favourable at the moment, he says, and there is growing consensus among economists that further interest rate decreases are likely during the course of 2026, provided that global monetary conditions remain supportive.
“Most are predicting that rates will come down by 100 to 150 percentage points over the next 12 months and as we know, even modest cuts can have a meaningful impact on the property market. Lower interest rates improve affordability, increase buyers’ borrowing capacity and boost confidence, particularly among first-time buyers and upgraders.”
What do lower interest rates mean for the property market?
However, he cautions that rate relief must be viewed alongside rising demand for well-located residential property, especially in secure estates and established urban nodes. “Demand is starting to outstrip supply in many parts of Johannesburg, and this is placing upward pressure on prices even as borrowing conditions improve.
What should buyers and sellers consider in 2026?
“For buyers, this means that waiting for significantly lower rates could come at the cost of paying higher purchase prices, while for sellers, improved affordability not only increases demand but also expands the pool of buyers with access to home loans.”
Whitcombe adds that the most advantageous market conditions for all parties are often found during periods of gradual rate reductions, when buyers have increased access to finance and sellers benefit from steady price growth over time rather than sharp spikes.
Why understanding the MPC helps property decisions
“Understanding how the MPC operates and what influences its decisions also helps consumers make better-timed property decisions, and with interest rates expected to trend lower during 2026 as demand for quality properties continues to rise, both buyers and sellers should be seek the assistance of professional estate agents now to help them make the most of what is shaping up to be an active and competitive market.”
