Many will undoubtedly be disappointed to hear that the Monetary Policy Committee did not choose to cut interest rates at their latest meeting, announcing instead that interest rates will remain stable at 8.25% , leaving the prime lending rate at 11.75%.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says this announcement is disappointing. “We expected to see interest rates drop by at least 0.25% within the first quarter of the year. We can now only hope that it will still happen within the first half of the year. The consolation is that interest rates did not increase any further. As high as interest rates are, at least we are nowhere near the 15.5% we experienced during the crash in 2018,” he notes.
Although a cut did not occur at this meeting, Goslett remains hopeful that we will still see interest rates lower by roughly 1% over the course of the year. “Given the dynamic nature of the global economy and the domestic factors affecting South Africa, it is difficult to predict with any certainty what the MPC might decide to do at future meetings.
Until then, Goslett expects that growth within the local housing market will remain muted owing to affordability issues. “Each suburb and price bracket will be affected by interest rates in varying ways. To find out what trends are emerging in your neighbourhood owing to the interest rate, speak to a local real estate professional for some free insights,” he concludes.
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