Repo rate cut welcome news for the property market
The surprise move by the South African Reserve Bank (SARB) on July 20 to cut the repo rate by 25 basis points to 6.25% will come as welcome news to property buyers, owners and letters in tight financial times, says Paul Stevens, the CEO of Just Property.
The repo rate has remained unchanged since March last year, when it was raised by half a percentage point, and the latest move is the first decrease in the rate in five years. The move comes on the back of declining inflation, which is also welcome news for South African consumers.
“The purpose of decisions like this is to stimulate the economy against the backdrop of a recession,” says Stevens. “We are optimistic that this will have a positive impact on the property market, with the lower interest rate making home-buying appealing for first-time buyers, and easing monthly mortgage repayments for existing owners.”