Since the property asset class is very capital intensive, an interest rate cut will benefit the sector from a cost of capital point of view. Responding to an "Independent Media Property" enquiry, Douw Boshoff, a Professor in Real Estate at the University of Pretoria(UP) said not only is bank financing cheaper, but due to the reduction in returns on the money market, the equity market becomes more...
On the eve of the South African Reserve Bank’s interest rates announcement, the big question is: Will South Africa follow Donald Trump? The President of the USA, the world’s biggest economy said with the oil price going down, he will demand that interest rates drop immediately and likewise, they should be dropping all over the world. “Interest rates should follow us. All over the world, the...
Another interest rate cut this week, together with the lower transfer duties announced in the budget last week, will add further impetus to the market, especially for first-time buyers. The South African Reserve Bank is expected to announce the March MPC rates decision later this week. While the Reserve Bank has taken a cautious tone regarding both inflation and future interest rate cuts,...
Focusing solely on rate cuts to gauge the country’s economic trajectory is misleading, says Dr Farai Nyika, an academic at the Management College of Southern Africa's(Mancosa).Following the recent South African Reserve Bank’s (SARB) 25 basis points rate cut, the education institution’s academic Dr Farai Nyika said he did not see a case for optimism regarding the economy’s outlook based only on this...
The South African Reserve Bank (Sarb) has announced that the interest rate would be cut by 25bp, but what impact will the cut have on bond repayments? According to Seeff Property Group, as a result of the 25bps rate cut, mortgage repayments will reduce by (based on a 20-year repayment period at the prime rate):BondOriginal bond repaymentNew bond...
An electricity tariff hike, announced on the same day as an interest rate hike has left South Africans no better off than before the latest 25bps announced by the Reserve bank.Even though there have been three consecutive interest rate cuts - the latest of 25bps by the SA Reserve Bank today - affordability is still a major barrier for potential property buyers, according to the Rawson Property Group.The...
Even though there have been three consecutive interest rate cuts - the latest of 25bps by the SA Reserve Bank today - affordability is still a major barrier for potential property buyers, according to the Rawson Property Group.The South African Reserve Bank’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, bringing the prime rate to 11%. Real estate service Seeff Property...
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) has decided to cut the interest rate by 25 basis points (bps) for the first quarter of 2025. The repo rate was cut by 25 bps and will fall from 7.75% to 7.50%. This means the prime lending rate will also drop from 11.25% to 11% This is the third consecutive cut by the MPC after a 14-year high. In September the Reserve...
The property sector has come out in strong support of a robust and decisive interest rate cut, while some believe a 25bps cut this week is a given, others say it should be no less than 50bps to make some impact on the lives of South Africans.Samuel Seeff, chairman of the Seeff Property Group, says the Reserve Bank must consider a minimum 50bps to counter decreasing growth and unemployment risks.“The time...
Some economists do not believe there will be significant interest rate cuts this year with some predicting a maximum of a mere 50 basis points (bps) cuts for the entire year of 2025 and others even predicting only one rate cut.The last cut came in November last year when the South African Reserve Bank (SARB) cut the interest rate by 25 basis points.The interest rate fell from 8% to 7.75%. This meant that...
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