While global markets are dealing with the economic uncertainty triggered by US tariff hikes, South Africa’s residential property sector continues to show encouraging signs of resilience.
BetterBond’s data for July shows that bond applications have risen by 7.4% for the 12 months to May 2025, with home loans granted up by an impressive 13.6%. This points to renewed buyer confidence and a more stable market environment.
Driving this upward trend is the recent easing of interest rates. With inflation recently comfortably within the 3 to 6 percent target range, we expect the South African Reserve Bank to announce another 25 basis point rate cut when the Monetary Policy Committee meets next week.
This would drop the prime lending rate to 10.5% – last seen in November 2022. Although not quite at pre-pandemic levels, this cut would bring welcome relief to homeowners and consumers. On a R2 million bond, by example, the lower prime lending rate would mean a saving of just over R300 a month.
This potential cut aligns with global monetary policy trends. Both the Bank of England and the Reserve Bank of India are both expected to reduce rates in August, suggesting a broader shift toward interest rate easing to stimulate economic activity. The US Federal Reserve is also expected to lower rates when it meets on 30 July, and the South African Reserve Bank is likely to follow suit the following day at its rate announcement.
The residential property sector continues to show encouraging signs of resilience notwithstanding global economic and political volatility. BetterBond’s July data shows that bond applications rose by 7.4% for the 12 months to May 2025, with home loans granted up by an impressive 13.6%. These volumes point to renewed buyer confidence and a more stable market environment.
Lower interest rates have been the largest driver of growing buyer confidence, and further relief is likely on the cards. With inflation currently well within the 3 to 6 percent target range, we are hopeful that the Reserve Bank will cut the repo rate by 25 basis points at next week’s Monetary Policy Committee meeting.
If this happens, the prime lending rate will drop to 10.5% – the lowest it’s been since November 2022. This would bring welcome and much-needed relief to homeowners and consumers, and further stimulate buyer activity.
Bradd Bendall, BetterBond’s National Head of Sales
