The new year started off with some great news as the Monetary Policy Committee (MPC) announced today that interest rates will drop by 0.25%, bringing the repo rate to 7.5% and the prime lending rate to 11%.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, welcomes the decision to lower the repo rate by 0.25%. This adjustment provides some much-needed relief for South African consumers and is expected to have a positive impact on the local property market.
“Following previous rate cuts in September and November, this additional adjustment positions the property market for potentially more favourable conditions in the months ahead, keeping in mind that the impact of an interest rate reduction typically becomes evident a few months after the market has had time to adapt to the change,” says Goslett.
This cut will also help mitigate some of the potential risks that face the South African economy following Trump’s recent inauguration. His appointment introduces new uncertainties and potential shifts in global economic policies, which could indirectly affect the South African economy and real estate market.
“If inflation increases as a result of his global trade policies, we might see the South African Reserve Bank tighten their stance around interest rates to keep inflation under control. Investors might also adopt a “wait and see” approach until Trump’s policy decision become clearer. If this is the case, it could have a negative impact on the local property market,” Goslett cautions.
But, for now, Goslett remains optimistic about how the property market will perform in the year ahead. “Despite the challenges that the year presented, we closed 2024 with a record-breaking R4.1 billion in registered sales during December, complemented by an additional R3 billion in reported sales. If 2024 ended on such a high note, 2025 holds immense potential for growth and success within our network, and possibly for the greater market overall,” Goslett concludes.
