SARB missed key opportunities to cut interest rates, says property group
Image: SARB/Facebook
The South African Reserve Bank (SARB) has definitely missed at least two vital opportunities to cut the interest rate, says Samuel Seeff, the chairman of the Seeff Property Group.
He told "Independent Media Property" that the lacklustre economy and the property market need an injection of energy, and no doubt it needs a rate cut, while the Bank has been too overly cautious.
'This is not a time for a 'wait and see' approach; it's time for bold action, and a cut of at least 25bps.
"The SARB stance has been particularly disappointing given that the data has been very favourable for lower rates throughout this year, with inflation below or near the bottom of the target range, and the ZAR relatively stable, notably trading below R18, even after Trump's latest tariff comments,' Seeff said.
While global markets are dealing with the economic uncertainty triggered by US tariff hikes, South Africa's residential property sector continues to show encouraging signs of resilience.
BetterBond's data for July shows that bond applications have risen by 7.4% for the 12 months to May 2025, with home loans granted up by an impressive 13.6%, says Bradd Bendall, BetterBond's National Head of Sales. He said this points to renewed buyer confidence and a more stable market environment.
'Driving this upward trend is the recent easing of interest rates. With inflation recently comfortably within the 3 to 6 percent target range, we expect the South African Reserve Bank to announce another 25 basis point rate cut when the Monetary Policy Committee meets next week,' Bendall said.
He said this would drop the prime lending rate to 10.5%- a level last seen in November 2022. 'Although not quite at pre-pandemic levels, this cut would bring welcome relief to homeowners and consumers. On a R2 million bond, for example, the lower prime lending rate would mean a saving of just over R300 a month.'
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
Ad loading
BetterBond said this potential cut aligns with global monetary policy trends. This was because both the Bank of England and the Reserve Bank of India are expected to reduce rates in August, suggesting a broader shift toward interest rate easing to stimulate economic activity.
The US Federal Reserve is also expected to lower rates when it meets on 30 July, and the South African Reserve Bank is likely to follow suit the following day at its rate announcement, the bond originator said.
Seeff said its take is that the Reserve Bank needs to be bold and act in the interest of the South African economy.
'The MPC needs to focus on what the SA economy needs, a bold rate cut which can serve as a rocket to push the economy and try and grow the GDP, a critical necessity given the unemployment rate and what is best for everyone in South Africa.'
The next SARB's Monetary Policy Committee will announce the July interest rates decision next week.
Independent Media Property
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Eyewitness News
40 minutes ago
- Eyewitness News
Europe hopes for 'no surprises' as US weighs force withdrawals
BRUSSELS - After keeping Donald Trump happy with a pledge to up defence spending at NATO's summit, Europe is now bracing for a key decision from the US president on the future of American forces on the continent. Washington is currently conducting a review of its military deployments worldwide -- set to be unveiled in coming months -- and the expectation is it will lead to drawdowns in Europe. That prospect is fraying the nerves of US allies, especially as fears swirl that Russia could look to attack a NATO country within the next few years if the war in Ukraine dies down. However, the alliance is basking in Trump's newfound goodwill following its June summit in The Hague, and his officials are making encouraging noises that Europe will not be left in the lurch. "We've agreed to no surprises and no gaps in the strategic framework of Europe," said Matthew Whitaker, US ambassador to NATO, adding he expected the review to come out in "late summer, early fall". "I have daily conversations with our allies about the process," he said. While successive US governments have mulled scaling back in Europe to focus more on China, Trump has insisted more forcefully than his predecessors that the continent should handle its own defence. "There's every reason to expect a withdrawal from Europe," said Marta Mucznik from the International Crisis Group. "The question is not whether it's going to happen, but how fast." When Trump returned to office in January many felt he was about to blow a hole in the seven-decade-old alliance. But the vibe in NATO circles is now far more upbeat than those desperate days. "There's a sanguine mood, a lot of guesswork, but the early signals are quite positive," one senior European diplomat told AFP, talking as others on condition of anonymity. "Certainly no panic or doom and gloom." 'INEVITABLE' The Pentagon says there are nearly 85,000 US military personnel in Europe -- a number that has fluctuated between 75,000 and 105,000 since Russia's 2022 invasion of Ukraine. "I think it is inevitable that they pull out some of their forces," a second European diplomat told AFP. "But I don't expect this to be like a dramatic overhaul. I think it's going to be gradual. I think it's going to be based on consultations." Trump's first target is likely to be the troops left over from a surge ordered by his predecessor Joe Biden after Moscow's tanks rolled into Ukraine. Officials say relocating the rump of that 20,000-strong deployment would not hurt NATO's deterrence too much -- but alarm bells would ring if Trump looked to cut too deep into personnel numbers or close key bases. The issue is not just troop numbers -- the US has capabilities such as air defences, long-range missiles and satellite surveillance that allies would struggle to replace in the short-term. "The kinds of defence investments by Europe that are being made coming out of The Hague summit may only be felt in real capability terms over many years," said Ian Lesser from the German Marshall Fund think tank. "So the question of timing really does matter." 'INOPPORTUNE MOMENT' Washington's desire to pull back from Europe may be tempered by Trump now taking a tougher line with Russia -- and Moscow's reluctance to bow to his demands to end the Ukraine war. "It seems an inopportune moment to send signals of weakness and reductions in the American security presence in Europe," Lesser said. He also pointed to Trump's struggles during his first term to pull troops out of Germany -- the potential bill for relocating them along with political resistance in Washington scuppering the plan. While European diplomats are feeling more confident than before about the troop review, they admit nothing can be certain with the mercurial US president. Other issues such as Washington's trade negotiations with the EU could rock transatlantic ties in the meantime and upend the good vibes. "It seems positive for now," said a third European diplomat. "But what if we are all wrong and a force decrease will start in 2026. To be honest, there isn't much to go on at this stage."
eNCA
2 hours ago
- eNCA
US Fed poised to hold off on rate cuts
WASHINGTON - The US central bank is widely expected to hold off slashing interest rates again at its upcoming meeting, as officials gather under the cloud of an intensifying pressure campaign by President Donald Trump. Policymakers at the independent Federal Reserve have kept the benchmark lending rate steady since the start of the year as they monitor how Trump's sweeping tariffs are impacting the world's biggest economy. With Trump's on-again, off-again tariff approach -- and the levies' lagged effects on inflation -- Fed officials want to see economic data from this summer to gauge how prices are being affected. When mulling changes to interest rates, the central bank -- which meets on Tuesday and Wednesday -- seeks a balance between reining in inflation and the health of the jobs market. But the bank's data-dependent approach has enraged the Republican president, who has repeatedly criticised Fed Chair Jerome Powell for not slashing rates further, calling him a "numbskull" and "moron." Most recently, Trump signalled he could use the Fed's $2.5-billion renovation project as an avenue to oust Powell, before backing off and saying that would be unlikely. Trump visited the Fed construction site on Thursday, making a tense appearance with Powell in which the Fed chair disputed Trump's characterisation of the total cost of the refurbishment in front of the cameras.
Daily Maverick
9 hours ago
- Daily Maverick
US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war
Deal includes $600 billion EU investments in US, more EU energy, defence purchases 15% tariff better than threatened 30%, in deal mirroring Japan's US steel and aluminium tariffs remain at 50% By Andrew Gray and Andrea Shalal The announcement came after European Commission President Ursula von der Leyen travelled for talks with U.S. President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. 'I think this is the biggest deal ever made,' Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied 'across the board'. 'We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,' she said. The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of U.S. energy and military equipment, will indeed bring clarity for EU companies. However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate. The deal mirrors parts of the framework agreement the United States clinched with Japan last week. 'We are agreeing that the tariff… for automobiles and everything else will be a straight across tariff of 15%,' Trump said. However, the 15% baseline rate would not apply to steel and aluminium, for which a 50% tariff would remain in place. Trump, who is seeking to reorder the global economy and reduce decades-old U.S. trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of '90 deals in 90 days.' He has periodically railed against the European Union saying it was 'formed to screw the United States' on trade. Arriving in Scotland, Trump said that the EU wanted 'to make a deal very badly' and said, as he met von der Leyen, that Europe had been 'very unfair to the United States'. His main bugbear is the U.S. merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to U.S. Census Bureau data. The EU points to the U.S. surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the 'hundreds of billions of dollars' that tariffs were bringing in. On July 12, Trump threatened to apply a 30% tariff on imports from the EU starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros ($109 billion) of U.S. goods in the event there was no deal and Trump had pressed ahead with 30% tariffs. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target U.S. services in the event of a no-deal.
