Rising interest rates will have an impact on South Africa's housing market, according to industry players. But the degree of that impact and when it will be felt the most is anyone's guess.

South Africa's housing market has largely dodged the Covid bullet and emerged as a bright spot in the economy.

The unprecedented cuts in interest rates by the Reserve Bank made mortgage borrowing cheaper, resulting in an increase in property purchases, especially by first-time homebuyers. The ultralow interest rates also paved the way for existing homeowners to upgrade to larger and more spacious homes to make lockdown life more bearable.

Not only have housing sales been on the rise since the early days of the pandemic, but house prices have also been growing - bucking the downward spiral seen in other sectors of the economy.

But industry players are warning that South Africa's housing market might cool off, as the Reserve Bank is expected to increase interest rates further over the coming months to tame rising consumer inflation.

When the Reserve Bank increases the policy or repo rate, commercial banks then increase the interest rates at which they lend to households. This has the effect of cutting the...