The interest rate cuts augured well for South Africa’s property market this year.
Image: Siyabonga Ngcobo
Interest rate cuts were perhaps the most memorable developments over this year in the property sector.
The general consensus is that both the short-term and long-term benchmark interest rates will continue to dip, according to Chris Tyson, the CEO at Tyson Properties.
He said that during November, the Reserve Bank’s Monetary Policy Committee (MPC) continued the rate cutting cycle that began during the third quarter of 2024, resulting in a prime overdraft rate of 10.25%, compared to 11.75% at the beginning of September last year.
“Throughout the year, the intermittent interest rate cuts were not only cheered on by struggling households but also by property professionals like us who saw the cumulative impact of individual small cuts begin to seep through and initiate a market recovery.”
The property company said that whilst the Cape market continued to boom, the KwaZulu-Natal market began to firm, and Gauteng is showing a consistent recovery.
In his attempt to predict what the market will do in 2026, Tyson said the indicators are that South Africa is going to have a positive year with a very buoyant market.
He says, although the jury is out on whether the expected continuation of interest rate cuts will gather momentum immediately or pause until mid-2026, the country can be certain that, ultimately, the prime rate will drop further.
“According to many economists, there is room for improvement as the prime rate remains behind the trend for long term interest rates. The current prime rate remains higher than just before the Covid-19 lockdowns and is also still 325 basis points higher than the rate that prevailed in October 2021.”
The CEO said, although there is concern that the MPC’s hand might be held back by the new inflation target of 3%, he was optimistic and noted that despite inflation having breached this limit, interest rates were still cut at the end of this year.
The property company said there are also numerous economic factors that echo a good end to 2025 and a better start to 2026, starting with the obvious one, which is that gold and platinum, which are the lifeblood of the local economy, continue to perform strongly.
“Whilst we all know that the property highway is not necessarily paved with gold, a stable mid-term budget which suggested a slight uptick in GDP growth and a relatively stable rand that has rebuffed local political turbulence and Trump’s now legendary tariff tsunami suggest that ongoing recovery is on the cards.”
According to Tyson, one of the most tantalising trends that suggests things are on the up is the return of many of those who have found that the proverbial cliché that the grass is not greener on the other side applies.
He said living expenses in those geographies are high, and many of our skilled professionals are coming home not only because remote work for foreign firms is now a possibility but because local land offers good weather, a vibrant culture, a more affordable lifestyle and proximity to families.
“Although Lightstone reports that the proportion of foreign buyers with residency has slipped from 3.8% in 2019 to 3.3% in 2024, recent improvements in South Africa’s financial credibility, along with a stronger rand, could encourage more expatriates to consider reinvesting in their home country,” said Bradd Bendall, the national head of sales at BetterBond.
“The removal of SA by the Financial Action Task Force from the grey list has sent a strong signal to foreign buyers that this country is a lower-risk investment option,” noted Bendall.
South Africa’s upgraded status eases cross-border requirements and improves access to finance, making international property transactions smoother overall.
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