DURBAN, January 16 (ANA) – The unanimous 25 basis point cut on interest rates by the South African Reserve Bank (SARB) was a welcome move for the country’s property industry, said CEO of Greeff Christie’s International Real Estate, Mike Greeff.
SARB governor Lesetja Kganyago made the announcement on Thursday. The decision was taken following this week’s Monetary Policy Committee meeting. The rate is now at 6.25%.
“The South African Reserve Bank has lowered the repo rate and this is a hugely welcome move for the property industry. This, coupled with inflation at a lower rate than last year at this time, theoretically means that those currently paying off bonds should make a huge effort to pay the instalments they were previously paying into a bond, and even a little bit more if possible, every month in order to save on interest and shorten the ultimate payback period,” said Greeff.
The lower repo rate also meant that banks were likely to be more lenient when approving bonds, he said, shifting the industry into a buyer’s market.
“Those looking for an investment property to rent out would do particularly well to purchase now, as incoming rental can stretch further to assist in paying off the interest bearing portion of a bond.”