The property sector has called on the South African Reserve Bank to hold off on a potential interest rate hike and to keep the repo rate unchanged when it meets this week.
 
Samuel Seeff, chairman of the Seeff Property Group, says that while the oil price spike and speculation about higher petrol prices are putting upward pressure, this volatility due to the Middle Eastern war must be seen as temporary rather than a reason for a premature rate hike.
 
The underlying fundamentals for keeping the rate unchanged remain strong. The Rand has remained fairly stable below ZAR17 to the USD. Inflation is contained within the Bank’s new target range and, in fact, dipped to 3.0% in February (from 3.5% in January and 3.6% in December), clearly suggesting there is no fundamental reason for a rate hike or an increase in the cost of debt at this stage.
 
In fact, Seeff believes the Bank missed a golden opportunity to cut rates in January, given the favourable inflation figures and a strong Rand. Rather than providing a vital boost to the economy and property market, we now face the risk that interest rates may be affected by a temporary glitch in oil prices.
 
In general, Seeff says the Bank has erred on the side of caution by not lowering the rate more quickly. Consequently, the lower rate has made no notable impact on economic growth or property sales. The GDP growth rate for the last quarter of 2025 was a disappointing 0.4%, and the year ended on just 1.1%, below the Bank’s own projection of 1.3%.
 
This lack of momentum is mirrored in the property market, where performance remains notably below expectations. He points out that the reported large increases in property prices, especially in the Cape, have masked the reality of weak performance in most areas, with overall sales volumes still down by about 19% compared to 2021/22.
 
Mortgage application data from ooba Home Loans also mirrors this trend. While the value of applications has improved marginally since the latter part of last year, the actual number of applications remains well below previous highs (2021/22 volumes).
 
Seeff notes that while confidence is beginning to return with an improved economic outlook, neither the economy nor the property market has felt a real uptick from the interest rate cuts, as they were simply too slow and too low.
 
Economic stability is now vital, and the market should not be unsettled by a rate hike which adds to the existing pressures on consumers and the economy. South Africans are already facing significant hikes in electricity and fuel costs.
 
The Bank should not add higher debt servicing costs to these burdens, especially since consumers have not been overspending. To ensure long-term stability and job growth, the Reserve Bank must hold the rate steady and maintain a positive outlook for future cuts.