All comments below by Dr Andrew Golding, chief executive of the Pam Golding Property group
A renewed sense of optimism in the broader economy, following the positive Medium Term Budget Policy Statement and today’s 25bps reduction in the repo rate, is set to boost sentiment in the residential property market, helping to stimulate increased sales activity.
While interest rate cuts typically take two to three months to translate into visible market movement, the prospect of a further reduction in early 2026, coupled with the possibility of avoiding the previously mooted R20 billion tax increase, provides a supportive environment for an increase in residential sales activity from the second quarter of next year.
We are already seeing a younger demographic of home buyers showing a strong appetite for entering the market, a trend particularly pronounced in Johannesburg. According to ooba Home Loans, first-time buyers accounted for 47.9% of all national applications in October 2025. In Johannesburg, this figure rises to 51.7%, while in the Free State first-time buyers represent an impressive 60.3% of all applications this year. Positively, housing activity in general has strengthened across the residential markets of Johannesburg, Pretoria and KwaZulu-Natal, while Cape Town and the Garden Route continue to deliver consistently robust performance.
With the current easing cycle having begun in September 2024, today’s rate cut brings the benchmark repo rate down to 6.75% and the prime lending rate to 10.25%. Among the positive developments highlighted in the MTBPS, Treasury has also officially adopted the 3% inflation target, reinforcing Government’s commitment to long-term price stability.
With Government now using the lower inflation assumption in its budgeting, it becomes easier for the South African Reserve Bank to anchor inflation expectations around the new 3% target. This target is more closely aligned with our global peers and should, over the medium to long term, create room for structurally lower interest rates. Such an environment supports economic growth and strengthens the housing market by improving affordability, particularly for first-time buyers.
Consumer inflation ticked higher in October 2025, rising to 3.6% from 3.4% in September. While broadly in line with market expectations, some had hoped for a further downside surprise, as seen in recent months. Nevertheless, headline inflation remains comfortably within the Bank’s new 2–4% target range, reinforcing the view that price pressures are contained.
Meanwhile, the recovery in house price growth continues to gather momentum across all three major regional markets. The Western Cape leads with annual growth of +7.4%, followed by KwaZulu-Natal at +2.8% and Gauteng at +1.3%, according to the Pam Golding Residential Property Index. Also according to the Index, national house price inflation rose to +3.8% in October 2025, averaging +3.3% for the year to date.
Source: Pam Golding Residential Property Index
