The South Africa Reserve Bank’s (Sarb) Monetary Policy Committee is expected to deliver its decision regarding the interest rate later in November and the overall sentiment is that there is strong likelihood of a 25 basis points cut to bring needed relief for consumers.

Reserve Bank Governor Lesetja Kganyago is expected to deliver the interest rates announcement on November 21.

Adrian Goslett, the regional director and CEO of RE/MAX of Southern Africa, said the possible interest rate cut to South Africa's inflation easing and global central banks cautiously beginning rate cuts.

While an interest rate cut will be welcomed, consumers are cautioned not to expect rates to dramatically lower in the near future as long-term outlook remains uncertain and the repo rate is expected to stay above pre-pandemic levels of around 6-7% through 2025.

Goslet said that while we cannot be certain how far interest rates will drop, homeowners and buyers should remain cautious but optimistic.

“A further rate decrease will undoubtedly offer greater temporary relief, but the property market's recovery is likely to be slow and will depend on broader economic conditions and consumer confidence,” Goslett said.

“Buyers and sellers will need to weigh up both the opportunities that exist within the current market as well as their long-term financial plans to decide how best to proceed given the current market.”

Goslett said that buyers or buyers, patience and preparation are key.

If interest rates drop further in November, it may create opportunities for lower monthly bond repayments. However, even if rates stay the same, it's still wise to act, as property prices will continue rising regardless.

“The best time to buy or sell a home is when you're financially ready, regardless of market conditions. Timing the market perfectly is difficult, but owning property remains one of the most reliable ways to build long-term wealth,” Goslett said.

“While potential interest rate cuts may benefit buyers and sellers in the short term, ultimately, real estate is a long-term investment, and waiting too long could mean missing out on current opportunities.”

Impact of September interest rate cut

According to Samuel Seeff, chairman, Seeff Property Group, the September interest rate cut was too conservative therefore there has not been a notable uptick in the South African property market.

However, in many urban areas - particularly the low to mid-priced segments - are seeing an increase in buyer activity due to the rate cut. The rise in buyer activity can also be attributed to the warmer months which tends to encourage more buyers.

“Seeff remains of the view that the interest rate is still too high, and the recent rate cut was too small,” Seeff said.

Yael Geffen, CEO, Lew Geffen Sotheby’s International Realty said that there is little doubt the September rate cut would be a significant shot in the arm for the property market as people have been waiting for it to get onto the property ladder, or to upgrade.

“Everyone was expecting the repo rate to go down in the second half of the year, and buyers have been waiting for it, because it makes a massive difference when you’re servicing a bond,” Geffen said.

IOL Property