Some good news to start the year off as the Monetary Policy Committee (MPC) announced today that interest rates will remain unchanged. The prime lending rate therefore remains at 10.25% and the repo rate at 6.75%.
“South Africans should celebrate this small victory by doing what they can to pay off their pre-existing debts as aggressively as possible while interest rates remain stable,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
For those hoping to enter the property market, Goslett advises that they leave room in their budget for the possibility of higher instalments on their home loan should the MPC choose to announce interest rate hikes at further meetings in 2019.
“For those who are delaying entering the market owing to the possibility of interest rate hikes, I would advise that they reconsider. Over the course of a twenty or thirty year loan term, interest rate changes are inevitable and cannot be avoided. Much like annual rent increases, interest rate hikes are simply part of the risk of owning property. Waiting for ideal market conditions will delay your plans of entering the market, thereby delaying the time it will take for you to pay off your home loan and minimalizing the time you’ll have living in or renting out a property debt free and reaping the rewards of your investment,” says Goslett.
Goslett also reminds South Africans that now is the perfect time for investors to enter the market. “Owing to the upcoming election period, the property market in general is likely to be off to a slower start in the first half of the year. If things continue to go favourably for our country, the property market might well shift into a seller’s market towards the end of the year, lessening the opportunities for buyers to pick up a good deal,” Goslett concludes.