The Reserve Bank Monetary Policy Committee (MPC) interest rate announcement took place on 23 September 2026. The repo rate was increased by 25 basis points to 7.25%. The prime lending rate has increased to 10.75%. The Inflation rate, economic growth and global market risks were taken into account. (Source)
News on inflation and interest rates in South Africa: The rate-cutting cycle from 2024 – 2025
The financial easing cycle started in September 2024, when the repo rate had peaked at 8.25%. This was the highest interest rate seen in 15 years and was kept for over a year. (Source)
The interest rate fluctuations reveal a stop-start approach:
September 2024: Interest rate cut of 25bp to 8.00% (the first cut in four years)
November 2024: Interest rate cut of 25bp to 7.75%
January 2025: Interest rate cut of 25bp to 7.50%
March 2025: Interest rate HELD at 7.50% (due to global tariff uncertainties)
May 2025: Interest rate cut of 25bp to 7.25% (easing was resumed)
July 2025: Interest rate cut of 25bp to 7.00%
September 2025: Interest rate HELD at 7.00% (second hold)
November 2025: Interest rate cut of 25bp to 6.75%
January 2026: Interest rate HELD at 6.75%
March 2026: Interest rate HELD at 6.75%
May 2026: Interest rate INCREASE to 7.00%
July 2026: Interest rate HELD at 7.00%
September 2026: Interest rate INCREASE to 7.25%
What were the patterns since September 2024?
Since the interest rate cut cycle started 14 months ago, the SARB has accounted for 150 basis points in accumulated cuts (1.5 percentage points). After the 50 basis point increases during May and September 2026, the current rate is 7.25%, which is 1 percentage point below the 8.25% peak reached in 2023. (Source)
The May 2025 interest rate cut boosted South Africa’s property market, with the repo rate dropping to 7.25% and the prime lending rate falling to 10.75%. Decreased borrowing costs improved affordability levels for investors, reducing monthly bond repayments and creating better opportunities for property investment.
Decreased interest rates in South Africa also improve investor purchasing power and help more buyers qualify for home loans. This increases demand in high-growth nodes such as Johannesburg, Pretoria and Cape Town. It also improves rental yields and cash flow for property investors.
The July 2025 interest rate cut was a relief to property investors. The repo rate was reduced to 7.00%, and the prime lending rate dropped to 10.50%. This means lower monthly bond repayments. This improves affordability levels for homeowners and investors. It also creates opportunities to refinance your current properties and unlock equity to reinvest.
The 20 November interest rate cut was based on data on inflation fluctuations. The October Consumer Price Index was at 3.6%. This is a bit above the SARB’s new target of 3% inflation, however, well within the range of 3-6%.
The inflation target and the decision-making process by the MPC
The most recent interest rate holds in January and March 2026 show the MPC’s caution as it continues balancing inflation control with economic growth factors. Finance Minister Enoch Godongwana formerly supported anchoring inflation closer to 3%, reinforcing the SARB’s longer-term objective of maintaining stronger price stability. Even though inflation has remained relatively contained in early 2026, the MPC is aware of global uncertainties, oil price fluctuations and the potential impact of international trade disruptions on the South African economy.
Since then, Inflation has increased, with annual consumer inflation reaching 4.4% in August 2026, which was raised from 4.3% in July. (Source)
This has stayed within the SARB’s 3%–6% target range; however, it was higher than the Central Bank’s preferred target of 3%. The latest inflation rate, together with other economic risks, influenced the September rate decision.
The September 2026 interest rate hike shows us that the MPC has moved away from the easing cycle of 2024 and 2025, heading towards a more cautious outlook in 2026. Interest rate decisions taking place going forward will depend on inflation rates, economic fluctuations and global risks affecting the local economy.
Global and local economic factors affecting the MPC meeting
The September 2026 MPC meeting decision was reached alongside global and local economic uncertainty. Inflation had increased to 4.4% in August 2026. A rise in business confidence has stimulated economic activity in South Africa. International risks, such as oil prices, geopolitical tensions, and a decline in global demand, put pressure on the South African market.
Property investors have remained positive amid lower interest rates in South Africa over the past 18 months. This improved affordability and boosted investments in key suburbs such as Johannesburg, Pretoria and Cape Town. The SARB will continue to assess local growth concerns and external risks before deciding on another rate adjustment in 2026.
What does 2026 look like?
The September 2026 interest rate increase will affect decisions throughout the rest of the year. The rate-cutting cycle showed 150 basis points of cuts between September 2024 and November 2025. The SARB has since increased rates by 50 basis points in 2026. Future interest rate decisions will depend on inflation trends, fuel price fluctuations, global market stability, and South Africa’s economic growth outlook.
Importantly, property investors consider the current interest rate environment to be better than it was during the hiking cycle in 2023 and into the beginning of 2024. Although borrowing costs have gone up from their 2025 lows, the current 7.25% rate remains below the previous 8.25% peak. Decreased borrowing costs, stronger affordability, and better home-loan conditions signal confidence in the South African property landscape. Beginner and seasoned investors can grow their portfolios.
Key takeaways
The latest MPC took place on 23 September 2026. Inflation movements, economic growth conditions and global market risks were assessed. This resulted in a 25 basis point hike in the interest rate to 7.25%, taking the prime lending rate to 10.75%. (Source)
What does this mean for property investors?
At IGrow, we are seeing investment interest from both beginner and seasoned property investors. A large number of IGrow investors have already expanded their portfolios during the recent interest-rate-easing cycle. Even with recent rate holds in 2026, the current interest rate environment remains far more favourable than it was at the peak of the cycle. With the September 2026 interest rate hike, this has increased borrowing costs, yet the current interest rate environment remains below the peak reached during the previous hiking cycle.
1. Greater affordability
Lower interest rates over the previous period reduced monthly home loan repayments, improving affordability for investors and helping more buyers qualify for property financing. However, the latest 25-basis-point increase means investors should now account for slightly higher borrowing costs.
2. Improved cash flow and ROI potential
Whether you own one buy-to-let property or a property portfolio, borrowing costs are an important factor when working out monthly cash flow and long-term ROI. IGrow investors should consider the current prime lending rate of 10.75% and take into account opportunities to refinance, reinvest and scale their portfolios strategically.
3. Increased investor confidence
Secure inflation and a supportive interest-rate environment bolster confidence in South Africa’s property market. There is still strong demand for well-located rental properties in key nodes such as Johannesburg, Pretoria and Cape Town.
4. A strategic time to review your portfolio
The property market conditions, at the moment, provide a prime opportunity to assess your investments, refinance and access equity to grow your portfolio. With the latest interest rate increase, reviewing your property portfolio’s cash flow, bond repayments and investment strategy is particularly important. IGrow investors are getting ahead of the next property growth cycle. This is because affordability remains favourable. This is because the current rate of 7.25% remains below the previous 8.25% peak.
Please note, EDGE certified eco-friendly properties are a winner, with what SARB announced! Some major banks offer preferential green bonds with 0.25% deductions in interest rates which you will continue to benefit from no matter the interest rate fluctuations. That is a big saving! Read our blog on EDGE certified properties to find out more and see our latest available properties in this category (the post is updated regularly).
Book a free consultation with an IGrow property investment strategist today to review your portfolio structure and explore your next investment opportunity in 2026.
