The latest 28 May 2026 repo comment from Bradd Bendall, National Head of Sales at BetterBond, re repo rate increase 25bpts.
WORDS & PHOTO: SUPPLIED
The decision to increase the prime lending rate to 10.50% reflects the mounting pressure created by ongoing geopolitical tensions in the Middle East, rising fuel costs and persistent inflationary risks.
Statistics South Africa has just announced that annual consumer inflation rose to 4.0% in April from 3.1% in March.
While today’s increase in the prime lending rate will place additional strain on consumers already grappling with higher living costs, it also signals a cautious approach aimed at protecting longer-term economic stability.
Despite the higher interest rate environment, the housing market has continued to show resilience. We have seen steady growth in bond applications, with a year-on-year increase of 6.2%, while home prices for both first-time and repeat buyers have reached record highs, marking the strongest growth seen since the recovery from the 2020 pandemic.
The latest rate increase is likely to affect market segments in different ways. First-time buyers, in particular, may face growing affordability pressures and could delay entering the market while they wait for more favourable lending conditions. However, opportunities still exist for aspirant buyers to enter the market through new developments or properties priced below the R1.21 million transfer duty threshold.
Added pressure
For existing homeowners, the increase in the prime lending rate will place added pressure on monthly budgets, particularly as fuel and household costs continue to rise. However, those who have planned carefully and maintained financial discipline are generally in a stronger position than they were during the higher-rate environment experienced through much of 2024.
In a climate shaped by global uncertainty, fuel price volatility and cautious lending practices, the rate increase may help contain inflationary pressures and support longer-term confidence in the economy. While higher borrowing costs may soften some housing activity, the demand for property remains resilient, particularly in high-demand regions, and among financially prepared buyers.
