Editor
The South African Reserve Bank (SARB) held the repo rate at 7.0% at its Monetary Policy Committee (MPC) meeting on 23 July 2026, keeping the prime lending rate at 10.5%. The decision, widely welcomed across the property sector, offers households short-term certainty, though it masks a genuine split among commentators over where inflation goes next.
A finely balanced decision
The hold was not a foregone conclusion. June CPI surprised on the upside at 5%, from 4.5% in May, and core inflation rose to 4.1%, edging above the SARB’s 3% target. Dr Andrew Golding, chief executive of the Pam Golding Property group, reads this as a warning sign, noting that the broadening of core inflation raises concerns about the potential emergence of second-round effects, where higher input costs begin to feed through more broadly into prices across the economy. He points to oil above US$90 a barrel and a weaker rand as making the outlook more challenging.
FNB chief economist Mamello Matikinca-Ngwenya takes a more sanguine view, arguing the inflation risk profile has become less acute as oil prices eased and no fresh shock materialised. The common ground is that, with growth fragile, the MPC chose to support activity rather than tighten. As Matikinca-Ngwenya puts it, keeping rates unchanged struck a balance between supporting a fragile growth environment and preserving the credibility of the transition towards a lower inflation target.
Why a hold still matters
For the property market, the practical message is stability. Holding rates will not lower bond repayments, but it removes the threat of higher ones, and Richard Gray, CEO of Harcourts South Africa, argues that certainty is itself the story. Property decisions are often delayed when buyers fear a manageable bond could become unaffordable, and sellers hesitate over financing their next home. “An unchanged interest rate may not deliver immediate relief, but it gives buyers, sellers and homeowners something equally important: certainty,” he says. RE/MAX of Southern Africa CEO and regional director, Adrian Goslett, makes a similar point, cautioning buyers against assuming rates will stay put and urging them to keep buying within their means.
Gray’s sharper argument is that a stable rate shifts the focus from the market to the individual. Buyers who use the period to reduce debt, build deposits and strengthen their credit profiles, he says, may be better positioned than those waiting for the next cut, since the official rate is only one input into the rate a bank actually offers. For sellers, he adds, the market stays active but selective, rewarding homes that are well presented and correctly priced against comparable sales rather than expectation. FNB, which is holding its own prime lending rate steady until the September MPC meeting, echoes the theme of planning: CEO Lytania Johnson says a stable rate environment lets customers manage their finances with greater confidence and make more informed long-term decisions.
Strongest house price growth since 2021
Underpinning the cautious optimism is a housing market that keeps outperforming. National house price inflation accelerated to 5.1% in June and averaged 4.8% over the first half of 2026, the strongest showing since the post-pandemic rebound of 2021. The Western Cape again led by a wide margin at 10.3%, well ahead of Gauteng (3.0%) and KwaZulu-Natal (2.8%), with Cape Town the standout metro at 11.1%. Demand at the entry level is holding up too: first-time buyers made up 48.8% of applications in June, and ooba Home Loans reports a national approval rate of 83.9%.
