Every time the MPC is set to meet, South Africans wait in bated breath to hear if their debt repayments will finally become easier to manage following a much-anticipated interest rate cut. After the markets respond positively to the new Government of National Unity, it remains to be seen whether that relief will come this month.
Last month the SARB’s Monetary Policy Committee, decided to keep the repurchase rate at its current level of 8.25% per year, meaning that the prime rate holds steady at 11.75%. The decision was unanimous.
“It is difficult to predict what the MPC will do at this meeting at the end of July,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “and while I am optimistic that an interest rate cut might come soon, I would caution homeowners not to get their hopes too set on this,” he advises.
Many experts predict that interest rates will hold steady in July and will likely drop by 25 basis points at the September meeting only. The latest inflation stats are unchanged from April at 5.2% in May. It might take a few months before inflation drops closer to the MPC’s target of 4.5%. Only then are we likely to experience our first interest rate cut.
Goslett says the fact that the markets are responding positively to the GNU makes me optimistic for economic growth and, as a by-product, growth in the real estate market too. The positive global response to the GNU is also likely to have a positive impact on the local housing market, as it makes South Africa seem more stable and appealing to foreign investors. It all depends on how long this positive sentiment will last. The outlook can change quickly depending on how the political landscape evolves,”.
“We are living through interesting times at the moment. I remain cautiously optimistic for what lies ahead and am hopeful to see more positive trends emerge within the local housing market as the year progresses,” he says.
lifestyle expenses homeowners should consider when trying to find ways to cut their expenses
- If you don’t already, start purchasing groceries in bulk to cut down on your monthly food bill – and avoid buying fast food, takeaway coffees, or eating out. The average cost of a takeaway coffee is around R30. If you do this daily, five days a week, you could be spending R600 a month or more just on coffee.
- Need new clothing? Consider second-hand items sold through Facebook Marketplace. Avoid buying anything on store credit (unless they’re interest-free accounts) and, if possible, pay these off as soon as possible and close your account.
- Cancel any unnecessary subscription services. These days, it is common to have subscriptions to multiple streaming services. Limit your household to just one at a time to save a couple of hundred Rand each month.
- If your cell phone contract is nearing its end, switch to pay-as-you-go instead of upgrading.
- It is worth finding alternative brands for your daily consumables, such as perfumes, deodorants, make-up, cleaning and food supplies, as this will go a long way to helping you reduce your monthly expenses.
Article courtesy of property24