March 23 2025 10:30
This is a guest piece by ooba.
Rhys Dyer, ooba CEO
The decision by the South African Reserve Bank’s (SARB) Monetary Policy Committee to keep the repo rate at 7.5% and the prime lending rate at 11% marks the first pause following three consecutive cuts.
Despite the hold, this stability remains a positive signal for homeowners and buyers, reinforcing confidence in a steadily recovering property market.
The cautious stance taken by global central banks – including the SARB and the US Federal Reserve – likely reflects concerns over escalating trade tensions between the US and key trading partners such as China, Canada and Europe.
Current market conditions may support a further 25 basis point rate reduction in May.
“In 2025, we’ve seen several positive market factors including the strengthening of the rand against the US dollar and below target local inflation numbers in the first quarter. Additionally, concerns over the financial strain on consumer demand of a VAT increase may create room for the MPC to lower interest rates further,” said Dyer.
Robust lending activity by major banks and cumulative interest rate cuts of 0.75% since September ‘24 will support and incentivise homebuyers in 2025.
Transfer Duty Threshold Increase: A Win for Homebuyers
The property market has received a further boost following the Finance Minister’s announcement of an increase in the property transfer duty thresholds in the recent Budget Speech.
Effective April 1 2025, and subject to approval by Parliament of SA’s 2025 Budget, the threshold for exemption from paying transfer duty has been raised by 10% from R1.1m to R1.21m, with all subsequent tiers raised by 10%. The transfer duty tax rates remain unchanged.
“This adjustment is particularly beneficial for first-time homebuyers where the average purchase price currently sits at just slightly over the R1.21 million mark,” said Dyer, adding that it reduces the upfront costs associated with buying a home and will enable more South Africans to realise their dream of homeownership.
South Africa’s Housing Market Remains Resilient
Despite broader economic pressures, South Africa’s housing market continues to show resilience.
National house price inflation climbed by +3.0% during Jan/Feb ‘25 compared to year-earlier levels. Among the major regional markets, Tshwane registered an increase of +10.1% during this period while prices in Johannesburg rose by +2.6%. Limpopo and the Free State also demonstrated robust growth in early 2025 at +12.% and +13.2%, respectively.
In addition, the banks are easing pressure on homebuyers by still offering attractive discounts on the prime lending rate and ooba Home Loans is currently achieving an average interest rate of prime minus 0.55% for its customers.
“We are really optimistic about the local property market for the remainder of 2025. The combination of stable interest rates, the increase in the transfer duty exemption threshold, and a resilient housing sector creates a positive environment for buyers,” Dyer said.
247@propertyflash.co.za