PROPERTY NEWS - Last week's Reserve Bank decision to leave the repo rate unchanged at 7% and the prime rate and variable home loan rate at 10,5% is good news for both homeowners and homebuyers.
This is according to Shaun Rademeyer, CEO of BetterLife Home Loans, who says that “It means that the monthly repayment on a home loan of R800,000 obtained at an interest rate of 10,5% will remain at just under R8,000 – and that will give existing homeowners some comfort.”
Low economic growth
However he adds: “Economists say the most pressing issue for the MPC at the moment is low economic growth and the real danger that SA could tip into recession before the end of the year – note the fact that inflation is running at slightly above the MPC’s 6% ceiling.”
Low economic growth
However he adds: “Economists say the most pressing issue for the MPC at the moment is low economic growth and the real danger that SA could tip into recession before the end of the year – note the fact that inflation is running at slightly above the MPC’s 6% ceiling.”
He continues: “With growth now projected to hit 0% in 2016, unemployment on the rise and a ratings downgrade quite possible at the end of the year, an interest rate increase to try to reduce inflation by curbing consumer spending at this stage would not have been wise.”
What is more, he says, most South African households are not actually spending excessively. Rather, they are struggling to make ends meet as a result of the high food prices induced by the drought, electricity and other tariff increases this year, and higher debt repayments as a result of the two interest rate increases imposed earlier this year.
What is more, he says, most South African households are not actually spending excessively. Rather, they are struggling to make ends meet as a result of the high food prices induced by the drought, electricity and other tariff increases this year, and higher debt repayments as a result of the two interest rate increases imposed earlier this year.
