A family of four is now paying R45,600 more to live in South Africa than they did a year ago

A South African family of four is paying roughly R3,800 more per month, or R45,600 more per year, than a year ago as higher fuel, transport and municipal costs continue to squeeze household budgets.

On 23 July 2026, the South African Reserve Bank announced it would keep the repo rate unchanged at 7%. This means that the prime lending rate will remain at 10.50%.

For homeowners with variable-rate bonds, this avoids a new increase in repayments this month, said Landsdowne Properties CEO and Founder Jonathan Kohler.

While this hold will give households a measure of breathing room after a difficult period for household finances, it does nothing to relieve pressure.

“Prime at 10.50% is below the 11.75% peak reached during the post-COVID hiking cycle, but it is still well above the 7.00% prime rate households saw at the Covid-era low,” Kohler said.

“On a R2 million bond over 20 years, the monthly repayment remains at roughly R19,968. That is about R1,700 less than at the recent peak, but still about R4,460 more than at the Covid-era prime-rate low.”

The absence of a further hike matters, but Kohler stressed that households do not pay their bond in isolation, and other costs are also rising.

Consumer inflation rose to 5.0% in June. Transport inflation accelerated to 12.7%, while fuel prices were 34.3% higher than a year earlier. Petrol was up 31.7% and diesel up 50.8%.

From 1 July, households in major metros also absorbed higher municipal bills, with increases across key services such as water, electricity, sanitation and refuse.

“This is where the hold still leaves homeowners exposed. The bond may not rise this month, but the rest of the monthly cost basket has not stood still.”

Advice for homeowners, buyers and sellers

While every borrower faces the same prime lending rate, Kohler said households do not experience affordability in the same way.

A family in Johannesburg, Durban, Cape Town or a smaller municipality may have the same bond repayment on paper.

However, they likely have very different municipal bills, service reliability, insurance costs, fuel exposure, body corporate charges, and backup power needs.

“For homeowners, this means the real test is not only the interest rate. It is whether the home remains affordable in the specific municipality, suburb, estate or building in which they live.”

For existing homeowners, Kohler said the hold should be used as an opportunity to stabilise cash flow rather than as permission to relax.

“Households under pressure should review monthly commitments, avoid using short-term debt to fund recurring expenses, and speak to their bank early if arrears are becoming a risk.”

“Waiting until the pressure is visible to everyone else usually leaves fewer options. A rate hold gives homeowners time. It does not remove the need for discipline.”

For buyers in South Africa, Kohler explained that the unchanged repo rate avoids a fresh deterioration in bond affordability.

“Some affordability calculations may therefore remain intact for now. That does not mean buyers should stretch. Prime at 10.50% is still a high borrowing cost compared with the Covid-era low.”

“Buyers still need to test whether the property works after the bond, municipal account, insurance, utilities, transport and other household costs have been paid.”

He added that prequalification remains important for prospective buyers, but it should not be treated as the full affordability test.

For sellers, Kohler said the decision should support some confidence because buyers have not faced another immediate rate shock.

“But buyers remain numbers-driven. Homes that are realistically priced, well presented and clear on monthly costs can still move. Homes priced on last year’s confidence may sit longer or face harder negotiation.”

“A rate hold does not remove demand. It keeps the market functioning, but the buyer across the table is still watching the monthly budget closely.”

Impact on the rental market

Kohler explained that the rental market may remain supported as some households delay buying and stay in rental accommodation for longer.

“But tenants are under the same cash-flow pressure as homeowners. Landlords should therefore be careful not to read rental demand as unlimited pricing power.”

“Rental increases that move too far beyond affordability can create vacancy, arrears or higher tenant turnover. In this environment, protecting occupancy and collection quality matters as much as pushing rental growth.”

Kohler also encouraged first-time buyers not to abandon the market. The rate hold gives some stability, but it does not restore cheap finance.

“Lower purchase prices matter, but lower monthly ownership costs matter too. Qualifying green-rated apartments deserve attention where they offer bank concessions or lower utility exposure.”

He recommended that South Africans who want to buy their first home still need to test price, location, levies, resale demand and management quality.

“The decision to hold rates reduces the immediate risk of another repayment shock. It does not restore affordability. That is the issue for the housing market.”

“Homeowners, buyers, tenants and landlords are still operating in a high-cost environment where the monthly budget matters as much as the purchase price.”

Kohler added that the next phase will be about more than what people can buy. It will be about what they can carry each month after the rest of their lives have been paid for.