The primary consequence of elevated interest rates is felt not on property prices, but on the number of buyers who are ready and able to make transactions. By diminishing affordability and confidence, higher rates ultimately compress market liquidity.
The South African Reserve Bank's (SARB's) recent decision to hold interest rates may have preserved billions of Rands in property market activity.
Last week, the Monetary Policy Committee (MPC) left the repo rate unchanged at 7% in another split vote, with only two of the six members favouring a further 25-bps hike.
Interest rates do not just affect bond repayments, but also affect whether property transactions happen at all, Nic Tromp, the CFO and partner at BLOK.
He says when the SARB began cutting rates in late 2024, home loan applications surged and transaction activity started recovering.
