The climbing interest rate now stands at the dreaded 15%. Deon Lessing,
marketing director of Betterbond, views the decision to raise interest rates
by half a percent as unfortunate, but rather expected.

“From a property point of view, the impact will continue to be felt as this
rate increase builds onto the preceding increases. I believe this increase
will push the declining rate of growth in house prices even lower than
previously anticipated,” comments Lessing.

“South Africans have already experienced tremendous amounts of pressure in
light of the rising fuel prices, the new property tax, looming increases in
electricity prices and rising food costs,” says Lessing. With the interest
rate having risen once again, consumers must exercise discipline and manage
their debt better.

“In light of numerous rate hikes experienced thus far, South Africa is
dealing with a correcting market, whereby property will move back into a
more realistic price range,” says Lessing.

Household spending data over the past months indicates that consumers are
feeling the strain of the higher interest rates. Real household spending is
therefore likely to be significantly weaker in 2008 on the back of very high
debt servicing costs, weaker real income and high fuel prices.

“Consumers should refrain from taking on any additional debt. The best
approach is to speak to your bank or mortgage originator about your
financial situation and consolidating your debt sooner rather than later,”
concludes Lessing.
Loading comments
More news articles
Guidelines to securing a home loan
29 May 2018
Many young South Africans are working hard to achieve their dream of purchasing their first home. However, the process can be challenging due to the daunting application process, which can take up to 2 years and is often enough to discourage prospective buyers.
read more
Things you should consider before upgrading to a new home
23 Apr 2018
The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
read more
Get pre-qualified
Make offers with confidence knowing what you can afford. Then shop for the best home loan