THE March interest rates decision carries significant weight as interest rates shape the economy through three key levers: the cost of debt, monthly bond repayments, and the confidence of households and investors.
Image: Independent Newspapers
THE March interest rates decision carries significant weight as interest rates shape the economy through three key levers: the cost of debt, monthly bond repayments, and the confidence of households and investors.
The South African Reserve Bank (SARB) will deliver the March interest rate decision on Thursday afternoon, IOL reported.
Lower inflation and borrowing costs improve affordability
At present, South Africa’s repo rate is 6.75%, and prime is 10.25%, while headline Consumer Price Inflation (CPI) eased to 3.0% in February 2026 from 3.5% in January, says Ezra Rasethe, the CEO of investRand.
He says this would normally support property, as lower inflation and borrowing costs improve affordability, but the MPC must still weigh global risks, particularly oil prices and currency volatility.
“For the property sector, the decision influences behaviour more than anything else. It affects whether buyers act now or delay, and whether investors deploy capital or remain cautious,” Rasethe says.
Data already points to a recovery phase
investRand says the data already points to a recovery phase. The property investment company says market sentiment is improving, activity is beginning to pick up, and pricing remains relatively stable.
“The Absa Homeowner Sentiment Index rose to 87% in Q4 2025, one of the highest levels on record, indicating that households are already leaning more positively toward buying, selling, and investing in property.H
The CEO says at the same time, pricing remains disciplined as Lightstone’s Property Index shows national house price inflation at 3.4% year-on-year, while Stats SA data places Johannesburg freehold growth at 6.2%. This reflects a recovery phase rather than a speculative surge, he adds.
The March decision is not the turning point; it is the confirmation, Rasethe says, “The recovery has already started. For working professionals, this is not just about monthly repayments. It is about timing. 2026 may represent a window where entry is still possible before stronger price momentum takes hold.”
Given the global backdrop, investRand says the ideal decision would be a hold with a cautiously dovish tone rather than an aggressive cut.
It says that the February inflation at 3.0% is supportive, but global conditions remain uncertain, with rising oil prices, currency volatility, and geopolitical risk influencing the outlook.
“Analysts increasingly expect the SARB to hold rates, reflecting these external pressures. At the same time, there is still a clear medium-term expectation of easing as inflation stabilises further.
“In uncertain markets, predictability is more valuable than stimulus. The SARB’s role is not just to reduce rates, it is to maintain credibility. An early or aggressive cut in a volatile global environment risks undermining that credibility, while a measured and consistent approach reinforces confidence across the economy.”
From a property perspective, Rasethe says this matters more than the cut itself. He says property markets respond strongly to forward guidance and stability. “If the SARB signals that inflation is under control and that future easing remains possible, it creates the predictability that investors and buyers need to act.”
He argues that lower rates do not drive property markets on their own, but confidence does. “And confidence is built through consistency, not reaction. For working professionals and property investors, this creates a more stable decision-making environment.
"Bond affordability, qualification, and long-term planning become clearer when policy direction is predictable.”
So the ideal outcome is a steady hand, investRand says. It says stability now, with a clear path to easing later, is far more constructive than short-term stimulus in a volatile environment.
Strong demand for rental housing, affordable housing, and well-located urban stock
According to the property investment company, the local property sector’s key advantage is that it is anchored in real, structural demand. It says that South Africa continues to have strong demand for rental housing, affordable housing, and well-located urban stock.
This provides resilience even in a volatile global environment, it adds.
“However, resilience in this cycle will require discipline. The first requirement is affordability. Buyers need to avoid overleveraging and focus on investments that remain viable under different interest rate scenarios.
"This is increasingly reflected in how lenders are approaching the market, with a stronger emphasis on affordability assessments and repayment sustainability.”
The expectation is that the SARB will maintain a hold on interest rates in March, while signalling a cautious but supportive path toward easing later in the year, says Maphefo Sipula, the head of Research and Impact at Property Point.
She says this outcome reflects the need to balance inflation risks with SA’s weak growth environment and constrained investment climate.
“While a hold prolongs short-term pressure on the property sector, clear forward guidance toward rate cuts would provide the certainty needed to support planning, investment and pipeline recovery.”
High borrowing costs continue to limit access to finance
For the property sector, the business which empowers entrepreneurs with the skills and training needed to succeed in the property industry says that, particularly within the SMME ecosystem that Property Point supports, the current environment remains challenging but not without opportunity.
“High borrowing costs continue to limit access to finance, delay project execution, and compress margins for small developers, contractors, and service providers.
"However, the anticipated shift toward an easing cycle creates a window for strategic positioning, where businesses that are financially disciplined, operationally efficient, and well-networked can begin to prepare for a recovery phase.
Need for SMEs to be more resilient
Sipula says that as a business development programme, their role becomes even more critical in this context.
“We expect increased demand for enterprise and supplier development support, particularly in areas such as financial readiness, access to markets, and partnership facilitation.
"There is a growing need to help SMMEs become more resilient, through improved cash flow management, diversification of income streams, and alignment with more stable segments of the property market such as logistics, mixed-use developments, and infrastructure-linked projects.”