The latest decision by the Monetary Policy Committee of the South African Reserve Bank to leave the repo rate unchanged has been welcomed by South Africans. This means that the repo rate remains at 7% with the prime lending rate at 10.5%.
This decision did not come as a surprise to the market, given the fact that the Consumer Price Index (CPI) has remained stable while the rand recovered some of its losses. Considering the fact that the current economic and housing market outlook remains flat, the third consecutive meeting with an unchanged rate is allowing consumers and homeowners to breathe a collective sigh of relief. At the same time prospective buyers are set to benefit from the fact that the housing market is likely to stay a buyer’s market for the time being at least. Experts are advising buyers to buy now, as price growth is unlikely to slow further, but to still apply caution.
“Consumers who are able to reduce their household debt-to-income levels have an increased chance of showing the necessary affordability levels to purchase a home. While it may be difficult to adjust to a more restrictive financial plan at first, it will bring them a step closer to owning a home. Affordability continues to be a driving force behind the property market, a rate hike would negatively impact that” – Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa
“Spring is here and traditionally this is a time when many people start considering selling, buying or relocating and as a result, it is a general truism that the market picks up from September. It remains to be seen whether this pattern reflects once more given that there are other factors at play (consumer affordability, bank lending criteria, consumer sentiment) that will have an influence.” – Dr Andrew Golding, CE of the Pam Golding Property Group
“We do not foresee anything in the short-term that will bring home prices down further so it is indeed a good time to buy. The banks are still lending and there is still time for buyers to get onto the property ladder, but caution is now the order of the day.” – Samuel Seeff, Seeff chairman