The Monetary Policy Committee (MPC) cut the country a break today when it announced that interest rates will remain stable, keeping the repo rate at 3.5% and the prime lending rate at 7%. This development comes after announcing at their previous meeting that the interest rates may increase by 25 basis points in the second quarter.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, this means that homeowners and first-time buyers continue to find themselves in a favourable position in terms of the interest rate charged on their home loan.
Goslett explains that these low interest rates have made owning a home a reality for many more South Africans, as the first-time buyers’ market is still incredibly active. “Owing to this increase in activity, we have already heard reports from some of our offices that there is a lack of stock available in their suburbs. It is possible that we are already beginning to see the swing from a buyer’s into a seller’s market, which means that we may soon start seeing prices begin their upward climb,” says Goslett.
Having said that, any increases in interest rates over the course of this year could hinder house price growth. “Even though the MPC has warned of potential increases of 25 basis points during 2021, it is possible that these increases may not come to fruition as this is all dependent on how the economy performs. However unlikely it may or may not be, homeowners should still leave room in their budget for this when planning for the year ahead,” he advises.