Rates down but prices may rise

● The unexpected 0.25 percentage point cut in interest rates last week should make your repayments a bit more affordable.

The rates cut equates to a saving of about R190 on the monthly repayment of a R1m loan, according to Carl Coetzee, CEO of mortgage originator BetterBond.

Sanisha Packirisamy, an economist at Momentum Investments, says while Moody’s is expected in its March ratings review to advise against the Reserve Bank’s monetary policy committee cutting interest rates again that month, a further cut later in the year is possible.

However, home buyers are warned to watch out for rising prices in the residential property market.

Pam Golding Property Group CEO Andrew Golding says despite SA’s ongoing economic challenges, including the restart of load-shedding, there are “signs of green shoots in the residential property market”.

After a period of correction with regard to house prices, home buyers are seeing the market in a positive light, he says. This is further buoyed by financial institutions’ robust appetite for lending, which is enabling more aspirant buyers to gain a foothold on the property ladder.