Interest Rates, Investment Strategy & Rental Returns: Why Now May Be the Smartest Time to Buy

As global economies adjust to inflationary pressures, central banks around the world - including South Africa's Reserve Bank - are signalling a shift. While interest rates in South Africa have remained steady at 11.75% prime, there’s growing anticipation that cuts may follow later this year.

But what does this mean for property investors and landlords?

Let’s unpack the opportunity hidden in the current interest rate climate - and why buy-to-let still makes sense.

The Silver Lining of a High Rate Environment

At first glance, elevated interest rates may seem discouraging. Monthly bond repayments are higher, and affordability becomes a concern for some buyers.

However, smart investors know that these conditions also create space to negotiate stronger deals:

• Motivated sellers are more flexible on price.

• Less competition from first-time buyers.

• Rental demand is soaring, especially in metros like Cape Town, Menlyn Maine, and Sandton.

With many would-be buyers choosing to rent instead, landlords are experiencing record-low vacancies and increasing returns.

Why Now Is a Strategic Entry Point

1. Pent-up Demand equals Rental Growth:

Rental inflation in well-managed apartments is outpacing CPI. Some nodes have seen rental increases of 6%–10% YOY, particularly in furnished and sectional title units.

2. Currency Advantage Still Favours Foreign Buyers:

For international investors, the Rand remains undervalued, making SA property a low-entry, high-yield asset class.

3. Interest Rate Cuts Will Boost Capital Growth:

When rates begin to fall, buyer activity surges. Entering now means you:

• Secure better pricing

• Lock in tenants

• Enjoy capital appreciation as the market rebounds

Landlords: Time to Reassess & Reposition

If you already own investment units, this is a crucial time to:

• Review rental rates and adjust where applicable

• Optimize tenant quality through improved screening

• Streamline maintenance and billing to boost NOI

• Reinvest in high-demand areas before interest rates ease

Fox Asset Management: Your Partner in Precision Property Investing

At Fox, we specialise in:

• Investment-grade sectional title apartments

• Full-service management & tenant liaison

• Local intelligence & hands-free oversight for remote investors

Whether you're an expat investor, trust manager, or seasoned portfolio landlord, we help you navigate the market confidently—and profitably.

The Bottom Line?

Interest rates are a cycle. Opportunity is a moment.

In South Africa’s resilient rental market, that moment may be now.

📧 Let’s talk strategy: hello@foxasset.co.za

🌐 www.foxassetmgmt.com

📍 Serving Gauteng & the Western Cape