Ra­tes re­main at their cur­rent le­vel

George Herald - Auto Dealer - - Property Guide -

South A­fri­can Re­ser­ve Bank go­ver­nor, Le­setja K­ga­ny­a­go, an­noun­ced that the Mo­ne­ta­ry Po­li­cy Com­mit­tee has de­ci­ded to keep the ra­tes at their cur­rent le­vels - this co­ming off the Re­ser­ve Bank’s last de­ci­si­on in Ju­ly to cut the ra­tes by

25 ba­sis points. Cur­rent­ly, the re­po ra­te is at 6,75%, with the pri­me len­ding ra­te at 10,25%.

Re­gi­o­nal Di­rec­tor and CEO of RE/MAX of Sout­hern A­fri­ca, A­dri­an Gos­lett, says that con­si­de­ring the ra­tes had on­ly been cut three mont­hs ago, keeping them ste­a­dy was a de­ci­si­on most would ha­ve ex­pected. “Whi­le ma­ny hou­se­holds would ha­ve been re­lie­ved that we are out of the ra­te hi­king cy­cle, it will still ta­ke so­me ti­me for the ef­fects of the ra­te cut to see frui­ti­on, if at all. Ma­ny con­su­mers ha­ve very high debt-to-in­co­me ra­ti­os, which could ta­ke a whi­le to recti­fy,” says Gos­lett. “Ad­ded to this, t­he­re are still a few ot­her as­pects that af­fect con­su­mer con­fi­den­ce and keep them on the si­de­li­nes, such as po­li­cy un­cer­tain­ty and the full im­pact of the cre­dit do­wn­gra­des.”

So­me e­co­no­mis­ts pre­dict that we are li­ke­ly to see furt­her ra­te cuts short­ly, gi­ven the fact that in­fla­ti­on is ex­pected to re­main be­low 5% for the re­main­der of the y­e­ar, and e­co­no­mic gro­wth has been very poor. In­fla­ti­on is bor­de­ring on two-y­e­ar lows, whi­le GDP gro­wth has re­a­ched le­vels not seen for the last eig­ht y­e­ars. The­se fac­tors are bound to re­sult in the Re­ser­ve Bank e­a­sing its mo­ne­ta­ry po­li­cy.

“With waning con­su­mer con­fi­den­ce, pro­per­ty tran­sacti­ons will re­main con­strai­ned e­ven with the ex­pected se­a­so­nal up­turn in the war­mer se­a­sons. Until t­he­re is im­pro­ved e­co­no­mic gro­wth and hig­her num­bers of con­su­mers with the af­for­da­bi­li­ty ra­ti­os ne­ces­sa­ry to pur­cha­se pro­per­ty, the pro­per­ty mar­ket will re­main re­strai­ned,” says Gos­lett.

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