PROPERTY NEWS - The South African Reserve Bank (SARB) will announce its decision regarding local interest rates at the MPC meeting to be held on 20 March – and so far, circumstances do not seem all too favourable.
With budget speech debacles and ongoing geo-political uncertainties set into motion by the Trump administration’s bullish policy making, it remains to be seen what the SARB will do at this meeting.
One positive is that inflation is still within the SARB’s target range of 3-6% and below the midpoint of 4.5%. Latest reports show that annual consumer price inflation is at 3.2% in January 2025, up from 3.0% in December 2024.
Despite the 0.2% increase in inflation since December, Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, remains hopeful of a possible further cut of around 0.25%.
“We are still below the midpoint target range for inflation, which makes this a good time to further stimulate the economy with another interest rate cut,” says Goslett.
He adds that the impact of the previous rounds of interest rate cuts is only starting to reflect in the property market now – “A further cut would help keep the momentum going and bolster activity within the real estate sector,” he notes.
According to the February 2025 BetterBond Property Brief, when 23-‘24 is compared to 24-‘25, “the most significant improvement is the return to positive growth for the number of home loans granted, which has staged a remarkable recovery from the sharp drop in 2023, induced by restrictive monetary policy”.
Now that we have entered an interest rate cutting cycle, home loans are becoming somewhat more affordable, making it more appealing to potential buyers.
“If we can keep interest rates down, the local housing market will become increasingly active and property prices will strengthen as a result,” Goslett notes.
“As the SARB’s decision on interest rates looms, we remain hopeful for further rate cuts that could stimulate economic activity and enhance affordability for homebuyers. Regardless of the outcome, agents remain committed to guiding buyers and sellers through the evolving market landscape and will offer tailored support to help meet their clients’ unique needs,” Goslett concludes.
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