The Reserve Bank’s interest-rate decision could affect developers’ access to finance, construction activity and affordability for South African homebuyers.
South African Reserve Bank (SARB) Governor Lesetja Kganyago is scheduled to deliver the Monetary Policy Committee statement tomorrow afternoon.
When interest rates rise, borrowing becomes more expensive. This can reduce the amount developers are able to borrow from financial institutions against the same security because higher repayments affect the affordability of debt, says Rob Buthelezi, executive chairman of RB Property Group.
He said the impact extends across the property value chain – from land acquisition and construction finance to housing affordability for end users.
“Looking ahead to the Reserve Bank’s decision, market expectations are that we may see a possible 25-basis-point increase. However, our hope is that interest rates remain unchanged to support economic activity, investment confidence and property development,” Buthelezi said.
He said renewed inflationary pressures, including higher global oil prices, have created a difficult balancing act for the Reserve Bank as it seeks to contain inflation while supporting economic growth.
“Our appeal is for a cautious approach that considers the broader impact on businesses, developers, homeowners and the economy. Maintaining stable interest rates would provide much-needed certainty and allow the property sector to continue playing its role in investment, job creation and economic development,” Buthelezi said.
Property development trends
Buthelezi said property development requires long-term confidence.
“A stable interest-rate environment helps us build more homes, unlock more projects and contribute to economic growth,” he said.
According to independent research economist Sandra Gordon, South Africa’s residential development trends are increasingly diverging by region.
Gordon said residential building plans passed during the first seven months of 2026 were nearly 19% higher than a year earlier. Higher-density development was driving the increase, with plans for apartments and townhouses rising by 32.7% and accounting for almost half of all plans passed during the period.
Entry-level and affordable freehold homes increased by 31.5%, although volumes remained about half those of apartments.
Gordon said the Western Cape is leading the shift towards densification.
Sectional-title plans in the province increased by 46.5%, while other categories declined. With many provincial plans concentrated in Cape Town, the city’s mountains and coastline constrain outward expansion. Scarce and expensive land is therefore pushing development towards higher-density housing, she says.
Gauteng, by contrast, is expanding outwards, Gordon said.
Entry-level and affordable freehold plans increased by 61.7%, making them the province’s largest residential category.
“Greater availability of developable land and a long-established pattern of outward expansion continue to support more affordable freehold development,” Gordon said.
Njongonkulu Makalima, a town and regional planner said the property market in KwaZulu-Natal is driven by an influx of semigration buyers looking for an alternative to Cape Town.
The core regional mixed-use and mega nodes include Sibaya Precinct, Umhlanga Ridgeside and Arch, Cornubia and Westown Shongweni.
given.majola@nationalmg.co.za