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.
The latest rate increase is likely to affect the property market segments in different ways.
First-time buyers, in particular, may face growing affordability pressures and this could delay entering the market while they wait for more favourable lending conditions, believes Bradd Bendall, National Head of Sales at BetterBond.
However, he adds that opportunities still exist for aspirant buyers to enter the market through new developments or properties priced below the R1.21 million transfer duty threshold.
“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.”
