Century 21 Highlights Market Shift As Interest Rate Cuts Drive Property Sector Recovery

Source: Supplied. Eva August is the chief executive officer at Century 21.

While many investors remain cautious, waiting for clearer signals, key fundamentals in the property market are quietly shifting. Historically, those who look beyond short-term noise and act on underlying trends tend to benefit most—suggesting that now could be a strategic window of opportunity worth careful consideration.

Interest rates: the biggest lever in the market

Since September 2024, the South African Reserve Bank has cut the repo rate six consecutive times, bringing the prime lending rate down by 150 basis points to 10.25% – the lowest it has been since 2022. For a buyer financing a R2m home, this cycle of cuts translates to meaningfully lower monthly repayments than a year ago, and that matters far more than most people realise.

Interest rates are, in practical terms, the single biggest on/off switch for property activity. When rates fall, banks become more willing to lend. Buyers who previously sat on the sidelines begin to qualify. Sellers who felt the market had stalled start to see genuine offers. We are seeing exactly that shift right now, with home-loan applications recording year-on-year growth after a prolonged period of decline.

Forecasts suggest the rate cycle still has room to ease further, though the pace will depend on global conditions and local inflation trends. With inflation sitting close to the Sarb’s revised 3% target, the signals for continued gradual easing remain broadly positive.

Fiscal policy and property confidence

The most recent national budget provided a modest but meaningful boost to market sentiment. Treasury’s decision to pull back on a planned R20bn tax increase removed a source of anxiety for households. Adjustments to income tax brackets for inflation mean consumers retain slightly more of their income each month – which helps with bond affordability and with covering ongoing homeownership costs such as rates, levies and maintenance.

The increase in the Vat registration threshold, from R1m to R2.3m, may seem peripheral to property, but it is not. The contractors, electricians, plumbers and service providers who keep homes market-ready and buildings well-maintained depend on an environment where smaller businesses can operate without excessive regulatory burden. Anything that supports those businesses ultimately supports the health of the broader property market.

What smart investors are doing right now

The question I hear most often is whether this is a good time to buy. My answer is that no time is ever perfect, but some windows are better than others – and this one is worth considering seriously.

A few principles apply for anyone looking to maximise returns in the current environment:

• Buy within your means, with room to absorb future rate changes. The easing cycle may continue, but global conditions remain unpredictable. A bond that stretches you today could become a burden if external pressures shift the trajectory.
• Location fundamentals remain the most reliable indicator of long-term value. Strong rental demand, infrastructure investment and proximity to economic activity should anchor every purchase decision, regardless of where rates sit.
• A stronger deposit opens better doors. Improved bond approval rates and more competitive lending terms consistently follow buyers who can demonstrate savings discipline – and government’s encouragement of a savings culture, reflected in recent fiscal policy, supports exactly this.Do not wait for the bottom. It is only visible in hindsight. By the time it is obvious that conditions were optimal, much of the opportunity has already passed.

The bigger picture

South Africa’s property market is not without its challenges, and I would not suggest otherwise. Unemployment, infrastructure strain and global economic uncertainty are real factors that demand honest assessment. But property here has consistently proven itself as a long-term store of value – and the current combination of declining rates, improved bank appetite and gradually strengthening demand represents a meaningful shift.

For those who approach the market with clear eyes, realistic expectations and a long-term view, the conditions are more supportive than they have been in several years. That is not a forecast. It is an observation grounded in what we see on the ground every day.