Key themes: • The risk of a less transitory rise in inflation and higher inflation expectations has driven more aggressive policy tightening in advanced markets and should result in the SARB further front-loading interest rate hikes. We now expect interest rates to peak at 6.75% by the end of 2022, slightly above the pre-pandemic level of 6.5%. We pencil in a moderate interest rate cut in 1H24. • The steeper-than-expected interest rate hikes suggest a less supportive environment for home buying activity. As such, market volumes should continue normalising towards pre-pandemic levels. • Support factors for market activity range from stronger post-pandemic household balance sheets and a recovery in non-labour income for higher income households to competition and innovation in the mortgage market, particularly in lower price segments. Downside risks include the rising probability of a global recession and escalating geopolitical tensions.