LOW INTEREST RATE = BEST TIME TO BUY!
Category Residential Property News
Nobody will argue. The low interest rate is definitely contributing to increased property sales and a surprisingly buoyant market.
When you take out a home loan, you're currently paying the lowest interest rate paid by South African consumers, in the last 50 years. The lowest in half a century!
Interest rates have been consistently cut during 2020, and today, we sit at 300 basis points lower than 2019. It's not surprising it's fuelled the property market, and that estate agencies are reporting record months in terms of sales and home loan applications.
South Africans are buying property!
The big question is, will the interest rate remain low? Yes, says Reserve Bank Deputy Governor, Fundi Tshazibana, speaking at the Absa annual fixed income conference. She believes they'll remain low for the next two years. In her opinion, despite the fiscal and monetary support provided, it's likely to take South Africa about two years to recover from the economic impact of the COVID-19 pandemic. She added that consumer inflation was likely to remain within the target range of between 3% and 6%, thereby allowing the Reserve Bank to keep a stable rate stance.
A stable LOW interest rate is very good news.
It's just what buyers and sellers want to hear.
For those who're buying, it's great to hear the interest rate is low, but it's even better to hear it's likely to remain that way for two years. This opinion from the Reserve Bank Deputy Governor gives many first-time and young homeowners in particular, the time they need to get their businesses and working life back on a solid footing. For those who haven't been severely impacted workwise by the pandemic, it's a golden opportunity to pay off more on your home loan than required - that'll stand you in good stead further down the line.
As Myles Wakefield, CEO of Wakefields Real Estate says, "A low interest rate for two years will continue to keep the property market active, and in that way, buyers and sellers alike, will benefit. Put that together with the banks' willingness to grant home loans - even 100 percent home loans - and that makes those two factors very strong economic drivers for the important South African property sector. It's a smart time to buy."
Author: Anne Schauffer
