The South African Reserve Bank (SARB) has reduced the repo rate by 25 basis points, which provides some additional financial relief for homeowners and prospective buyers.
This decision, announced after the Monetary Policy Committee (MPC) meeting, brings the repo rate to 6.75% and the prime lending rate to 10.25%. The decision was unanimous.
As a result of the cuts, a bond holder with a home at the average vaue of R1.7 million will see their monthly repayments cut by R280 per month.
Reserve Bank governor Lesetja Kganyago said that while inflation has ticked higher, it is due to non-core items and temporary shocks, like in the red meat market.
“We continue to see this pressure as temporary, with inflation heading lower again from the beginning of next year. Indeed, recent outcomes have undershot our forecasts slightly,” he said.
According to Dr Andrew Golding, chief executive of the Pam Golding Property group, the decision comes at a time when confidence in the broader economy is already improving after a more positive Medium Term Budget Policy Statement.
He said the rate reduction should lift sentiment and eventually support more sales. “Interest rate cuts typically take two to three months to translate into visible market movement,” he said.
He added that the possibility of further cuts in early 2026 and the likely scrapping of a R20 billion tax increase give the housing market some support going into next year.
For buyers, lower rates directly improve affordability because the cost of servicing a home loan comes down.
This is important after a period of higher borrowing costs, which slowed the market. Samuel Seeff, chairman of the Seeff Property Group, said the rate cut is particularly good news because it makes home loans cheaper and could draw more buyers back into the market.
He believes this should lift demand and support sales volumes, which would help both buyers and sellers.
Seeff also pointed to other recent developments that could improve economic conditions.
This includes South Africa’s exit from the Grey List, an S&P credit rating upgrade for the first time in 20 years, better job growth data, and a slightly improved economic outlook.
He said the rate cut adds “vital relief” by lowering debt costs and freeing up more spending money, which is helpful ahead of the busy retail season.
Tyson Properties CEO Chris Tyson agreed that the series of rate cuts since September 2024—now adding up to 150 basis points—is starting to make a difference for the property sector.
He is also encouraged by the Reserve Bank’s new, simplified inflation target of 3%, which replaces the old 3% to 6% range for the next two years.
This shift, he said, should help bring inflation expectations down and create space for lower interest rates in the future. That would support household spending, business investment, and ultimately job creation.
However, Tyson warned that many potential buyers are still hesitant. The start of each year usually brings increases in municipal rates, water and electricity tariffs, and insurance premiums.
These costs are likely to keep inflation above the preferred 3% target for now. He also noted that salary and bonus increases are likely to remain muted as economic growth stays weak and global uncertainty continues.
“People have to decide to purchase a home when it is financially the right time for them, and that might not be the case right now,” he said.
Overall, property experts see the latest rate cut as a helpful step, but not a quick fix. It offers immediate financial relief and could encourage more activity over the next year.
However, its impact will depend on how households manage rising living costs and whether broader economic conditions continue to improve.
Along with the optimism shown by the property experts, the 25bps provides tangible relief of at least R142 at the lower end.
Data from ooba Home Loans shows that a 25-basis-point reduction translates to monthly savings of R168 on a R1 million bond and R335 on a R2 million bond.
The latest oobarometer report highlighted that the average home price in South Africa has climbed to R1,695,257. This means the 0.25% drop in interest rates will bring notable relief to homeowners.
For the average South African home priced at R1.695 million, the monthly repayment decreases by R284, providing much-needed relief to households.
While uncertainties remain, the combination of lower rates, easing inflation, and renewed confidence will benefit the property market and prospective buyers.
The savings on bonds for property prices between R850,000 and R5 million can be found below:
Savings
| Bond value | September 2025 (10.50%) |
November 2025 (10.25%) | Saving |
|---|---|---|---|
| R850,000 | R8,486 | R8,344 | R142 |
| R1,000,000 | R9,984 | R9,816 | R168 |
| R1,500,000 | R14,976 | R14,725 | R251 |
| R1,695,257 | R16,925 | R16,641 | R284 |
| R2,000,000 | R19,968 | R19,633 | R335 |
| R2,500,000 | R24,960 | R24,541 | R419 |
| R3,000,000 | R29,951 | R29,449 | R502 |
| R3,500,000 | R34,943 | R34,358 | R585 |
| R4,000,000 | R39,935 | R39,266 | R669 |
| R4,500,000 | R44,927 | R44,174 | R753 |
| R5,000,000 | R49,919 | R49,082 | R837 |
