The South African Reserve Bank’s decision to leave interest rates unchanged will provide welcome relief for homeowners and prospective buyers, says Standard Bank Head of Home Services, Toni Anderson. She adds that the decision gives consumers greater certainty at a time when many households continue to manage ongoing cost-of-living pressures.
“After some uncertainty around the interest rate outlook after the 25-basis points hike in May, a hold provides welcome relief for homeowners and aspiring buyers. It means monthly home loan repayments remain unchanged and gives those looking to buy new homes more confidence in their planning,” says Anderson.
Even though consumer inflation jumped to a two-year high in June, driven by fuel prices, Standard Bank still expected the Monetary Policy Committee to keep rates unchanged in July, because of easing food inflation. “Against that backdrop, today’s decision provides the relief and certainty many homeowners and prospective buyers were hoping for. This hold should support positive momentum in the property market because stable borrowing costs help buyers make purchasing decisions with greater certainty,” says Anderson.
She adds that affordability remains one of the key drivers of activity in the residential property market. The lower interest rate environment in the past two years benefitted many buyers, and not hiking the rates again this time helps preserve those gains.
Anderson says the decision is likely to be welcomed by both homeowners and sellers. “We expect continued interest from homebuyers, particularly in the affordable and first-time buyer segments of the market,” she concludes.
Red Delicious
Easy business conditions: In the World Bank’s 2017 Doing Business Report, South Africa was ranked 74 out of 190 countries. The ease of doing business not only brings investment into the country, but creates a desirable environment in starting a business. It is relatively easier to start a new venture in South Africa than other economies in the world.