The South African Reserve Bank’s decision to keep interest rates unchanged has been welcomed by the property sector, with Standard Bank saying the move will provide relief for homeowners and prospective buyers, while mortgage originator ooba said it would help sustain confidence in the housing market. 

The decision follows a 25-basis-point rate increase in May and comes as policymakers weigh persistent inflation risks, geopolitical tensions and subdued domestic economic growth.

Standard Bank head of home services Toni Anderson said leaving the repo rate at 7% and the prime lending rate at 10.5% would give consumers greater certainty as many households continue to grapple with cost-of-living pressures.

“A hold provides welcome relief for homeowners and aspiring buyers. It means monthly home loan repayments remain unchanged and gives those looking to buy new homes more confidence in their planning,” Anderson said in a statement.

Anderson said affordability remained one of the key drivers of activity in the residential property market and that stable borrowing costs should continue to support demand, particularly among affordable and first-time buyers.

Mortgage originator ooba Group also welcomed the decision, saying South Africa’s housing market had remained resilient despite global economic uncertainty.

Rhys Dyer, the chief executive of the ooba Group, said holding rates would help sustain confidence in the residential property market by giving consumers greater certainty over borrowing costs.

“In an environment characterised by global volatility and persistent inflationary risks such as this week’s announcement of a consumer inflation figure of 5.0% for June, maintaining the current rate supports confidence among homebuyers and homeowners,” he said.

Dyer said stable borrowing costs would allow consumers to plan with greater certainty and should help sustain momentum in the residential property market.

Despite economic uncertainty, first-time buyers remained active, accounting for 48% of home loan applications during the first six months of the year, according to ooba. However, the average age of first-time buyers has risen to 36, suggesting affordability pressures are delaying entry into the housing market.

Dyer said demand has also been supported by banks continuing to offer high loan-to-value mortgages, with zero-deposit loans accounting for 56.9% of applications and cost-inclusive loans making up 6.1%.

He added that geopolitical tensions and broader economic uncertainty would continue to weigh on the outlook, but stable interest rates and continued lender support should help underpin the housing market.