Although not quite the cut most homeowners were hoping for, the Monetary Policy Committee (MPC) announced today that interest rates will remain stable at 8.25% (repo rate), leaving the prime lending rate at 11.75%.
While a cut would have created more welcomed relief, Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that this announcement will at least avoid placing further strain on debt holders.
“Many, including a host of first-time buyers, bought when interest rates were at their lowest back in 2020 and have had a harsh introduction to what homeownership is like. Thankfully, it seems we are entering into a period of a bit more stability now, with this being the second announcement where interest rates have held steady,” says Goslett.
Many economists predict that we will see an interest rate cut within the first half of the year. “While it is not expected that this cut will be a large one – possibly only 0.25% – it will have a positive impact on homeowners debt repayments and buyers affordability concerns,” he notes.
Goslett also hopes that this will be the start of more stability to come. “It is likely that we are nearing the end of the interest rate hiking cycle and are beginning to see the light at the end of the tunnel.”
Sharing his final thoughts on the matter, Goslett says that although the high interest rates have not brought the property market to a standstill, it has hamstrung growth and throttled activity for quite some time now. “I am looking forward to seeing how much growth we will see within this sector once interest rates become less of a concern,” says Goslett.