Property market outlook ahead of the July 2026 MPC announcement
Every MPC announcement is closely watched by homebuyers, homeowners, investors and the property industry alike. Ahead of the Monetary Policy Committee's latest interest rate decision, Herschel Jawitz, CEO of Jawitz Properties, shares his perspective on the current economic landscape, inflationary pressures and what the outcome could mean for South Africa's residential property market.
The Reserve Bank's Monetary Policy Committee meets this week against a backdrop of inflation that has picked up sharply since the start of the year, driven largely by higher fuel costs. Consumer inflation rose to 4.5% in May, its highest reading in almost two years, and is expected to have moved higher still in June before easing somewhat in July. This follows the MPC's 0.25% hike in May, which took the repo rate to 7% and the prime lending rate to 10.5%, the first increase in three years.
The rate increase earlier in the year had no real impact on buyer activity and demand remains positive. Sentiment among buyers, sellers and investors remains firm, and demand continues to outstrip supply across most price bands and regions. Property price growth is currently running at its strongest pace since the post-Covid period, supported by a competitive lending environment and banks continuing to compete for market share. Given these factors, the market should remain resilient even if rates go up a further 0.25%.
The bigger risk to the market is not this single decision but how long elevated fuel prices and inflation persist. Should the MPC need to hike again later in the year, or hold rates higher for longer, affordability will come under greater pressure, particularly for first-time buyers and tenants.
For now, the residential market remains well placed to absorb this week's outcome, whichever way it goes.