Stable interest rate great news for best buyer's market in decades
The South African Reserve Bank's Monetary Policy Committee has decided to keep the repo rate at 3.5% and the prime lending rate at 7% after its third Monetary Policy Council meeting for 2021.
Lesetja Kganyago, SARB Governor announced during a press briefing on Thursday that "going forward, a stronger exchange rate, ongoing moderation in unit labour costs, and sustained economic slack are expected to offset higher electricity and food price inflation, keeping the headline inflation forecast relatively stable."
While to date, much of the updraft in the property market has been interest-rate induced, driven by first-time buyers, overall volumes, which is about 20,000 per month at best, remains well below what it should be for such a low interest rate. This is due to a large sector of the market not transacting to any notable degree for some time.
This may, however, be about to change. There are early signs that confidence could be returning to the upper end of the market. President Cyril Ramaphosa’s recent actions against corruption both in terms of his Zondo Commission testimony and demonstrable implementation of the ANC’s “step-aside rule” has been a confidence boost.
Foreign and second home buyers are also investing again, not just on the Atlantic Seaboard but in the coastal towns such as Plettenberg Bay as well. SA expats also seem to be investing in property with the intention of returning to the country.
South Africa is still one of the best places to live and buy property in and conditions remain favourable for buyers, both from an interest rate and price growth perspective. Overall, we believe property prospects for the year ahead look very positive and we'd be delighted to assist with any of your property needs.
Best to all, Margie, Clare, Fiona, Terry, Arlene, Alison & Jane