SA Reserve Bank cuts repo rate to 6.75 percent - what this means for your bond

The South African Reserve Bank (SARB) announced a 25-basis-point reduction to the repo rate, bringing it down to 6.75%. This adjustment lowers the prime lending rate to 10.25% – the lowest it’s been in over two years – and signals a continued easing cycle aimed at boosting economic activity and consumer affordability.

The move builds on an already noticeable upward shift in market confidence, says Craig Mott, national sales manager for the Rawson Property Group.

“We’ve seen a steady increase in buyer engagement throughout the year, and this latest rate cut is likely to accelerate that momentum,” he says. “It’s arriving at a time when buyers are re-entering the market with purpose, and this just gives them more reason to act.”

Another interest rate cut also means homeowners will breathe a sigh of relief knowing that they will have a bit extra in their pockets for the festive season because they have to pay less on their monthly bond repayments, says Bradd Bendall, the national head of  Sales at BetterBond.

He says the November MPC decision means the repo rate has dropped a cumulative 150 basis points since November last year.

The bond originator says its latest data points to a residential property market that is steadily gaining momentum.

"Home loan applications have increased by 30% since the third quarter of 2023-the highest level since early 2022. The proportion of home loans granted to first-time buyers is 17.4% higher year-on-year, an important indicator of market recovery.

"Deposits required for bonds are also trending lower, declining by 21% for new buyers.

"Today’s rate cut is expected to further improve affordability and access to credit, giving buyer confidence another welcome boost as we head into the festive season," says Bendall.  

Rate cut brings optimism in the broader economy

There is a renewed sense of optimism in the broader economy, following the positive Medium Term Budget Policy Statement (MTBPS) and the recent 25bps reduction in the repo rate, which is set to boost sentiment in the residential property market, helping to stimulate increased sales activity, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

"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."

Meanwhile Samuel Seeff, chairman of the Seeff Property Group, said the decision was anticipated given the favourable economic indicators. This includes inflation at a historic low of just under 3.3% on average for the year, and despite the recent uptick, still comfortably within the Bank’s proposed new lower target range of 2-4%. The currency also remains stable below R18.00 to the USD, recently strengthening to around ZAR17.20.

Further good news for the economy includes the Grey List exit, and S&P credit rating upgrade to BB  (the first in 20 years), positive job growth data for the last quarter and a slightly better growth outlook. The cut brings further vital relief to the economy, lowering the cost of debt and freeing up more disposable income to spend in the economy, especially ahead of the busy annual retail season.

The rate cut is particularly good news for the property market, says Seeff. It will further boost affordability, and demand, especially as the market continues to lag despite the four rate cuts since the third quarter of last year.

Younger homebuyers

Pam Golding Property group says it is 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, the group says. 

"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 the Government’s commitment to long-term price stability," Golding says.

The decision by the SARB to lower interest rates during the current global economic climate is a favourable approach to aid in financial relief for many South Africans, says regional director and CEO of REMAX Southern Africa, Adrian Goslett.

"As a result of stagnant economic growth, this small rate cut can provide a financial buffer for homeowners and prospective buyers across the country.”

Goslett says with inflation under relative control, the SARB has adapted their strategy from a more cautious stance in September, to a controlled change approach in November, opting to lower interest rates by 0.25%.

"This move suggests increasing faith that the domestic economy is slowly relieving itself from external risks, including unpredictability in the global market and local tax pressures, to permit modest monetary support."

2025 was turbulent

The decision by the SARB MPC to cut interest rates by 25 basis points from 7% to 6.75% has also been welcomed by Tyson Properties CEO, Chris Tyson. He says that although this year has been a turbulent one for the economy as a whole, accumulation of smaller interest rates since September last year has added up to good news for the property sector.

With cuts now reaching the 150-basis point mark, he believes that this could continue to have a positive impact on the entire property sector going forward into next year.

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