The SA Reserve Bank’s decision to trim the repo rate by 25 basis points — the first since signalling a potential 3% inflation target — has reignited confidence in the country’s residential property sector.
While modest, the cut offers much-needed relief in a persistently high interest rate environment, and expands home ownership prospects for first-time buyers and middle-income earners grappling with affordability pressures.
Pam Golding Property Group CEO Andrew Golding described the move as a critical incentive for aspirant homeowners and relief for existing mortgage holders.
“First-time buyer demand has stalled at 46.4% of applications in the first half of 2025, according to ooba Home Loans. The latest interest rate cut — along with the previous cut, lower fuel prices, and subdued inflation — is expected to revive activity in this rate-sensitive segment and boost overall market sentiment,” he said.
Landsdowne Properties founder Jonathan Kohler, highlighted the affordability boost from the rate cut combined with recent transfer duty reforms.
“Buyers earning about R22,000 a month can now qualify for homes priced near R640,000, while those earning R45,000 can access properties up to R1.32m. The government’s recent changes to transfer duty mean that properties valued below R1.21m are now exempt from this tax, saving buyers up to R24,000 — a significant boost to affordability,” Kohler said.
Kohler said several regions are set to benefit from improved affordability. The Western Cape remains the top hotspot, especially in areas such as Bellville, Parow and the southern suburbs, driven by semigration.
Despite price stagnation in Gauteng, high-demand nodes include Kempton Park, Pretoria East, Centurion, and northern Sandton suburbs such as Bryanston and Sunninghill. KwaZulu-Natal hotspots such as Umhlanga Ridge and Durban North continue to attract buyers due to coastal appeal and logistics growth, Kohler said.
BetterBond’s latest Property Brief highlighted Pretoria as SA’s newest property hotspot, with bond applications rising 26.7%, driven by student housing demand, reverse semigration, improved services and strong affordability.
BetterBond national head of sales Bradd Bendall said the lower prime lending rate provides much-needed relief to consumers and homeowners struggling to balance monthly obligations amid rising living expenses. For the average homeowner with a bond, this reduction could translate into meaningful monthly savings.
“On a R2m home, by example, the monthly bond repayments will drop by R337 from R20,305 to R19,968. It will also reduce the amount payable over a 20-year period by R80,876,” Bendall said.
He said BetterBond expects the rate cut to boost the housing market, which has already shown signs of recovery. Data from BetterBond for the 12 months to May shows bond applications increased 7.4%, while home loans granted rose by 13.6%.
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