Many potential property buyers are sitting on the sidelines waiting for interest rates to drop.
South African workers with mortgage loans, or those planning to buy a home through mortgage financing, are facing the rising cost of servicing debt as a more immediate concern.
Dr Roelof Botha, economic advisor to the Optimum Investment Group, said that the real prime overdraft rate, adjusted for inflation, currently stands at 7.2%. This is more than 130% higher than it was in 2014.
According to Botha, monetary policy authorities have prioritised the fight against inflation at a time when South Africa’s construction sector is already struggling to stay afloat.
“The values of building plans approved by most local authorities have declined by more than 50% since interest rates were pushed to their highest levels in 15 years, while total unemployment reached a historic high during the first quarter of 2026,” he said.
