Bradd Bendall from BetterBond comments on this week’s Repo Rate announcement – all things considered, he expects it to hold steady.
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Although homeowners would welcome another repo rate cut, we expect the repo rate will hold steady at 7% after the Reserve Bank meets next week. Despite inflation remaining within the target range of 3 to 6%, the recent slide up to 3.5% – its highest level in 10 months – suggests that a further interest rate cut at this time is unlikely. If the Reserve Bank is intent on shifting the inflation target closer to 3%, maintaining the prime lending rate at 10.5% will be necessary for now.
Stability supports the long-term goal of reducing production costs, stimulating consumer demand and driving renewed economic growth. There are already encouraging signs that we are on track. Absa’s latest Quarterly Perspectives report points to a 0.3% quarter-on-quarter GDP increase, with growth expected to reach 1.6% next year.
Market resilience
Bradd Bendall BetterBond
The property market continues to demonstrate remarkable resilience. Five interest rate cuts since September last year have helped stabilise conditions.
BetterBond’s data shows home loan applications went up 12% year-on-year in July, the highest level since late 2022.
House prices have also strengthened, increasing 2.1% year-on-year, while the average price for first-time buyers hit a new high of R1.3 million. Both increases outpaced inflation, reflecting continued demand, particularly in provinces such as the Western Cape.
Holding the repo rate steady represents a necessary pause to support long-term economic stability and future growth.
For homeowners, it calls for short-term restraint with the potential for renewed momentum in the property market when the next cycle of rate cuts begins, hopefully within the next few months.
