The hotly debated topic of an interest rate hike has finally been put to bed with today’s SARB announcement to increase the repo rate by a further 0.25%. This marks the second interest hike since November 2021, bringing the base home rate to 7.5%, with a further two interest rate hikes anticipated in 2022.
Leadhome Properties’ CEO, Marcél du Toit forecasts that the rate increase will have little impact on the back of a record bullish South African residential property market, particularly as prime interest rates are still attractive and repayment increases remain marginal. On a R1 million loan, for example, the monthly repayment increase is R152 and on R2 million, it is R304.
Other factors, he says, such as inflation, load shedding and consumer confidence are more likely to influence people’s decision whether or not to invest in a property. According to Leadhome’s data, the bullish trajectory seen throughout 2021 is set to continue, with January numbers significantly higher, year on year.
“This may be attributed to the market seeing renewed confidence in property as a long-term investment, a vehicle to build wealth and improve wellbeing. People working from home and/or hybrid are rethinking their living and working spaces and are embracing a more fluid lifestyle. Furthermore, as South Africans, we are feeling more secure in our jobs and incomes. So, as business becomes more sustainable, the fear factor is being removed from investing and we are seeing the value in buying property.” Says du Toit.
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