INTEREST RATE HIKE MEANS HIGHER REPAYMENTS ON HOME LOANS
After months of enjoying record-low interest rates, South African debt holders now face slightly higher repayments as the Monetary Policy Committee (MPC) has just announced that the repo rate will increase by 25 basis points to 3.75%, leaving the prime lending rate at 7.25%.
While remaining hopeful that this increase will not have too profound of an effect on the property market as a whole, Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, warns that tough times are ahead for homeowners who have not left room in their budgets for this increase.
Despite this, Goslett explains that the RE/MAX network continues to record record-breaking sales totals across the country ever since interest rates dropped last year. “Year-to-date September, our reported sales totals are up by 45% while property registrations are up 75%. This hyper-activity is largely owing to the low-interest rates as well as a change in lifestyle brought about by the pandemic,” says Goslett.
“My hope is that this interest rate hike will just bring activity back to normal volumes,” he adds. “Now that the economy has been allowed to open up further and vaccination rates are increasing, the hope is that we’ll see an end to the rising unemployment rates. The housing market is very closely linked to how well the greater economy is performing, so we remain hopeful that these factors will contribute towards greater economy stability, especially now that interest rates have been raised,” says Goslett.
As a final word of advice, Goslett says that there will be opportunities in any market – you simply need to know how to find them. “Seek the advice of your nearest RE/MAX agent who can keep you informed on the latest market conditions and any new opportunities as and when they arise,” he concludes.
For more real estate news or to enlist the help of a reliable real estate professional from the largest real estate brand in Southern Africa, visit www.remax.co.za.