The South African Reserve Bank's monetary policy committee, has elected to keep the repo rate unchanged at 6.5% and the prime lending rate remains at 10% despite concern for long term weakness in many sectors of the economy. On the global front, moderate economic activity, weak business fixed investment and exports, and global uncertainties has led the Federal bank to lower its benchmark interest rate by a quarter-point and estimates two more cuts by the end of the year.
For consumers and property owners, it still remains a good time to get into the market as property prices are more affordable and banks are willing to grant home loans.
Tony Clarke, Managing Director for the Rawson Property Group, urges consumers to continue with paying down their debts as fast as possible, while taking on new debt still needs to be handled conservatively especially as we move towards the last quarter of the year and the holiday season. “ It’s time for consumers to boost their savings as much as they can especially if they are planning to buy a home,” says Clarke. “This will go a long way towards minimising the effect any future interest rate increases will have on the security of consumers’ property investments and help new purchasers cover their necessary fees and deposits, despite tight financial times.”
Clarke says, from a property market perspective, to expect a slow and steady improvement in price growth and a continued boost in buyer confidence. “This time will also present a valuable opportunity for buyers and investors to secure sound medium to long term investments at good value.”