INTEREST RATE CUT WELCOMED. BUT COULD IT HAVE BEEN MORE?

The South African Reserve Bank's recent decision to cut the repo rate by 25 basis points, to 10.50%, is a step in the right direction but for many in the property sector, including us at Wakefields Real Estate, it feels like a cautious step when a confident stride was needed.

With inflation at its lowest level in years, currently sitting around 3%, there's a compelling argument that the Reserve Bank is behind the curve. The last time inflation was this low, the interest rate stood closer to 9%, far lower than Prime's new 10.50%. While we respect the Minister's desire to protect the Rand,  particularly in light of global instability, tariff uncertainty,  and risk premiums associated with our country, we believe that this overly conservative approach continues to place unnecessary pressure on South African households.

Buyers Are Winning, With or Without the Rate Cut

Despite the modest decrease, there is a very interesting ,positive development in the property market and buyers are benefitting.

The latest Q2 2025 oobarometer report from ooba Home Loans, has its clients securing prime less 0.67% in Q2, a marked improvement over previous quarters. This points to a clear and encouraging trend: improved affordability, competitive bank lending, and increasing buyer confidence.

Application volumes have climbed by 11% year-on-year, on a national bases, and the total value of applications has jumped by 18.5%, a strong signal that buyers are taking advantage of better financing conditions. And in KwaZulu-Natal, average deposit values remained reasonable (between 12.2% - 14% of the purchase price), reflecting a healthy balance between affordability and accessibility.

First-Time Buyers Stepping Up

First-time homebuyers, especially in the under-35 category, are making the most of current conditions. According to ooba, this group spent 3.5% more on homes in Q2 compared to the same time last year, with 59% purchasing with no deposit and over 10% securing bond and transfer-inclusive deals.

That means more young South Africans are taking their first steps onto the property ladder, and they're doing so with strong bank support and greater financial flexibility than we've seen in years.

What This Means for You

For prospective buyers, the key takeaway is this: you don't need to wait for a massive rate cut to make your move.

Banks are lending. Rates are competitive. The market is improving. And with the right guidance, this is still a strategic and opportune time to buy, especially in a province like KwaZulu-Natal, where lifestyle and value intersect.

While the Reserve Bank's "slow and steady" strategy may frustrate some, we're encouraged by the downward trend in interest rates, and we're hopeful for further cuts in the months ahead.

Until then, Wakefields is here to help you navigate the current conditions and unlock the door to your new home. The #WakefieldsWay.