The article examines how South Africa's so-called 'cheap money' era was misleading due to inflation's impact on borrowing costs.Prizm Property Partners highlights that nominal interest rates alone don't reflect real debt costs, which fluctuate with inflation.For instance, while prime rates dropped to 7% in 2020, the real cost of debt remained high at 3.8%.By 2022, rates climbed to 9%, yet with inflation at 8%, borrowing became cheaper in real terms.However, by February 2026, despite a slight easing to 10.25%, inflation returning to 3.2% pushed the real cost of debt to 7.1%, among the highest in the period analyzed.The piece underscores that policymakers must balance inflation targeting with currency pressures and global uncertainties.

Analysts suggest the SARB's upcoming decision will hinge on whether current rate hikes are a one-off response to supply shocks or the start of a prolonged cycle, as the tone of the policy response could significantly influence buyer confidence in the property market.