No Further Increase of Repo Rate Yet

The Reserve Bank’s Monetary Policy Committee met on Thursday and analysts’ predictions that it wouldn’t raise the Repo Rate have proven accurate. The rate has been increased twice this year and currently stands at 5.57% and John Loos, FNB Household and Property Sector Analyst, forecasting that the MPC will likely only recommence with moderate hikes in 2015.
Bruce Swain, MD of Leapfrog Property Group concurs with this view stating that “the MPC has been quite conservative when it comes to raising the repo rate and so it comes as no surprise that they’ve elected to maintain the rate at its current level. Barring unforeseen circumstances we certainly don’t expect it to go up again in 2014.”  
Could the hiking of interest rates be good for property?
Loos believes that the current slow hiking is having a positive effect on the property market saying that “while the housing market is not necessarily the SARB’s primary focus, it so happens that its SARB approach of gradual “normalization” (meaning “hiking”) of interest rates is exactly what the “doctor ordered” in order to keep the market “well-behaved”. Had it not started interest rate hiking this year, the market may have just started to go crazy.”
Swain believes that the previous increases in the repo rate haven’t harmed the residential property market but that it has made buyers slightly more cautious. “Buying a property is always a big financial commitment and we’ve repeatedly cautioned against making an offer to purchase without having taken costs such as municipal rates and increases in the repo rate into account.”
That being said Bruce believes that the market still has much to offer and that while home buyers should be cautious, they by no means need to refrain from buying; “the residential property market growth has been slow but steady and buyers needn’t worry about another ‘bubble’ pricing them out of the market. I’d advise people to do their homework, make sure they can afford the purchase (having taken next year’s interest rate hikes into account) and then, by all means, to buy.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us