The South African Reserve Bank (SARB) has announced at the latest Monetary Policy Committee (MPC) meeting the decision to increase interest rates, with the repo rate now at 7.25% and the prime lending rate at 10.75%.
According to Adrian Goslett, CEO and Regional Director of REMAX Southern Africa, while many South Africans may be disappointed by the decision, it is understandable given the continued uncertainty in the global economic environment.
“The Reserve Bank had a tough decision this month as they weighed out local inflationary pressures against an uncertain international economic environment. While inflation fell to 4.3% from 5%, it is still well above the 3% target, meaning the SARB still needs to tread carefully when considering any changes in the months to come.”
Additionally, developments in the global economy have placed renewed pressure on fuel supplies, pushing international oil prices even higher. Should this translate into higher fuel prices locally, consumers could begin to feel the ripple effects across their everyday expenses.
“For homeowners and prospective buyers, this can translate into higher living costs, placing additional pressure on household budgets and reducing the amount of disposable income available for bond repayments or saving towards a house,” explains Goslett.
While an interest rate increase is never welcome news for homeowners or prospective buyers, Goslett advises existing consumers to review their monthly expenses, plan accordingly and ensure that they understand what they can comfortably afford.
For more real estate advice or to get in touch with your nearest REMAX Office, visit www.remax.co.za.
