select
|

Comment on interest rate announcement

Despite previous warnings from the Reserve Bank that the public could expect further rate hikes towards the end of the year, it was decided at this month’s Monetary Policy Committee meeting that the interest rate would remain at its current figure. The prime lending rate will stay at 9.5 and the repo rate will remain at 6%.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the decision to keep the rates where they are will be a relief to homeowners and consumers who are still coming to terms will the last rate hike and the rising cost of living. He notes that financial pressure from external sources such as higher food prices, higher electricity and water tariffs and a weaker Rand-Dollar exchange rate has had an impact on the property market over the last few months. Consumers are having to deal with their expenses increasing, while their income remains the same. This will make it harder for homeowners to hold onto their properties and for potential buyers to get a foot into the market.

Although the recent lower oil prices could moderate inflation to some degree, the weaker currency against the Dollar has caused inflation to edge closer to the upper end of the Reserve Banks’s target band of 6%. If this continues, we are likely to see rate hikes in the near future, be it in November or early next year. “Inflationary pressure will strengthen the Reserve Bank’s position to hike the rates. Homeowners and consumers need to prepare for future rate hikes by reducing household debt and increasing savings,” says Goslett. “While higher interest rates will impact potential buyer’s affordability ratios, the higher rates can also prove to be an advantage to those who are building up their savings for a deposit and other costs associated with a property purchase.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK