What interest rate cuts mean for South Africa's property market

South Africa's recent interest rate cut is set to boost the country's property market going into 2025.

The Reserve Bank's Monetary Policy Committee (MPC) has implemented a second consecutive interest rate cut, reducing rates by 25 basis points at its November meeting. This adjustment lowers the repo rate to 7.75% and the prime lending rate to 11.25%.

While the cut offers relief to consumers facing high living costs, some experts have argued that it falls short, as many were expecting even deeper cuts.

Nevertheless, this cut is set to relieve homeowners of some mortgage burdens and attract a wave of first-time homebuyers to the property market.

With optimism surrounding the Government of National Unity (GNU), dropping petrol prices, and the expectation of further rate cuts, South Africa's property market is set to experience tailwinds going into 2025.

Lower rates are crucial to drive economic growth, job creation, and a more robust housing market recovery.

With improved economic sentiment from the Government of National Unity, reduced inflation, and no load-shedding, Lifestyle Property Group foresees a revival in the residential property market in 2025.

As a result of the 25-basis point rate cut - based on a 20-year repayment period at the prime rate - mortgage repayments will reduce by:

• R750 000 bond - from R7 998 to R7 869 - thus saving R129

• R900 000 bond - from R9 598 to R9 443 - thus saving R155

• R1 000 000 bond - from R10 664 to R10 493 - thus saving R171

• R1 500 000 bond - from R15 996 to R15 739 - thus saving R257

• R2 000 000 bond - from R21 329 to R20 985 - thus saving R344

• R2 500 000 bond - from R26 661 to R26 231 - thus saving R430

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