Interest Rate Statement (Remains the Same) - Chris Tyson, CEO of Tyson Properties

An intricate balancing act is how Tyson Properties CEO, Chris Tyson, describes the current state of play within South Africa's property sector following today's decision by the South African Reserve Bank Monetary Policy Committee to pause interest rate cuts, leaving the benchmark rate at 7.5% and the prime lending rate at 11%. 

Although Tyson predicted a series of cautious rate cuts between September last year and mid-2025, this halt in no way means that the interest rate easing cycle is at an end, he believes. 

The Reserve Bank has cut interest rates three times since September 2024. Although, individually, each 25 bps cut did not have a major impact on home financing, the combination of three consecutive cuts is still beginning to have a positive impact and is sparking improved market sentiment. 

Tyson points out that with the consumer inflation remaining unchanged in February 2025, this remains within the Reserve Bank's favoured target band opening the way for further rates cuts later this year. With fuel prices holding steady together with the rand despite US President Donald Trump's decision to expel the South African ambassador, he remains optimistic that there will be further relief further down the line. 

Transfer duty adjustments announced in the government budget are another positive signal for property investors, especially those entering the market for the first time. Buyers at the bottom end of the market will not have to pay transfer duties on properties below R1.21 million, Tyson adds. 

However, although the VAT increase will not directly impact property sales, he says that it will ultimately put pressure on peripheral costs such as legal fees, agent commissions, home related services and construction. Already, month-on-month inflation has accelerated due to increased pressure on the prices of food and financial services and the VAT increase is expected to exacerbate this. 

Tyson cautions buyers and sellers to carefully balance the leeway afforded by the previous rates cuts against other factors that could impact on household disposable income, including the proposed increase in VAT and upcoming hikes in electricity tariffs in April. 

In the short to medium term, he says it remains important for sellers to price their properties correctly to  attract the now growing pool of more optimistic buyers in most key markets across South Africa. On the flip side, buyers need to exercise caution and stay well within their means when purchasing new properties - but can be more confident knowing that a more positive market is already paving the way for an improvement in property values.