This Thursday, the South African Reserve Bank’s (SARB) Monetary Policy Committee announces its latest interest rate decision, and property investors will naturally be paying close attention. Here’s a plain-language breakdown for our investors of where things stand and what South Africa’s major banks are predicting.
Where rates are right now
The repo rate currently sits at 6.75%, with the prime lending rate at 10.25%. SARB held rates steady at its January 2026 meeting, following a cut in November 2025. That January hold was not unanimous as four members voted to keep rates unchanged, while two favoured a further reduction.
At the start of the year, the picture looked encouraging. Inflation had moderated, the rand was performing well, and South African economists broadly anticipated another cut at this week’s March meeting, with a further cut to follow later in the year.
Then the Middle East conflict escalated, and the picture shifted dramatically. It’s not all doom and gloom, but there is a whiff of caution in the air.
What changed
The conflict in the Middle East has sent Brent crude surging above $119 a barrel, while the Rand has weakened as investors move funds into safe-haven assets. For South African households, this translates directly into fuel price pain: current estimates point to a petrol price increase of between R3 and R4 per litre for April, with diesel prices potentially rising by more than R7 per litre. These are increases that ripple through transport costs, food prices, and the broader inflation outlook. These are precisely the sort of conditions that give the MPC pause.
South Africa’s annual inflation rate slowed to 3% in February, aligning with the SARB’s target. However, that reading predates the latest escalation in global tensions and the fuel price increases, which will only reflect in April’s data.
What the banks are predicting
FNB / RMB: FNB CEO Harry Kellan confirmed that FNB’s house view had been for two more cuts in 2026, but acknowledged the oil price shock changes things.
“You can’t blame the Reserve Bank if they don’t cut at the next MPC meeting,” FNB CEO, Harry Kellan said.
He believes a rate hike remains unlikely unless inflation pressures become entrenched, and that the SARB may treat the current oil shock as transient, but a hold on Thursday is now the most probable outcome in FNB’s view.
Absa: Absa’s pre-conflict baseline forecast was for 50 basis point cuts in 2026, bringing the repo rate to 6.25%. The bank has since warned that rising global energy prices will narrow room for central banks to cut policy rates. Absa does, however, describe the bar for a rate hike as “quite high” and does not expect a reversal of the easing cycle, but rather a delay.
Standard Bank: Standard Bank Group has revised its interest rate forecast in response to rising oil prices. The bank had noted that South Africa’s average inflation dropped to 3.2% in 2025 — the lowest level in 21 years — which had provided meaningful room for rate relief. The Middle East conflict has, however, introduced a new layer of uncertainty into the near-term outlook.
Investec: Investec has been among the most direct. Investec economist Lara Hodes confirmed the MPC is now projected to hold rates on Thursday, noting that prior to the conflict, expectations had firmly pointed to a March cut. The Investec chief economist Annabel Bishop now projects the next 25 basis points cut will come in Quarter 3 2026, with the repo rate reaching 6.50% by year-end. Investec’s investment strategy head went further, saying the oil spike “rules out the possibility of rate cuts” in the near term.
Nedbank: had previously forecast a gradual path of cuts through 2026. While the bank has not published a specific revised forecast for Thursday’s decision, the broader consensus shift toward a hold aligns with Nedbank’s historically cautious approach to the SARB’s easing cycle.
What this means for property investors
A hold on Thursday is not bad news for property investors. It means stability and predictability in bond repayments. The medium-term direction of rates remains downward, with most economists still expecting at least one cut before the end of 2026. The SARB’s own Quarterly Projection Model continues to forecast gradual cuts as inflation subsides, with the repo rate projected to reach approximately 6.31% by the end of the year – though with the current geopolitical excitement, only time will tell.
For investors currently in the market, monthly contributions and bond repayments will hopefully remain unchanged. For those considering entering the market, current conditions — a multi-year low prime rate of 10.25% and strong rental yields across South Africa’s key development nodes — continue to make a compelling case for property as a long-term wealth-building vehicle. Historically, property markets in South Africa have remained very stable throughout major upheavals in economic outlooks.
If you’d like to understand how the current rate environment affects your specific property investment plans, book a free consultation with the IGrow team today. Remember that your dedicated Investment Strategist has the full backing of our in-house team of valuation modelists, bond specialists, rental management specialists, and a legal and tax accounting team to help you make property investment decisions that take the full picture into account.
