50 basis points increase another blow for consumers already battling record high fuel prices and food costs

Posted On Friday, 20 May 2022 13:55 Published by
Rate this item
(0 votes)

Joff van Reenen, Founding Partner and Lead Auctioneer of specialist real estate auction company High Street Auctions, says as much as the repo rate increase of 50 basis points was not unexpected, it’s certainly not welcome.

“It’s a lot for consumers to absorb on top of a 30% year-on-year increase in fuel prices, food prices going through the roof and electricity costs going up as power outages continue to batter production.

“Average South Africans aren’t seeing wage increases to keep pace with these rising prices, so people are going to accumulate more debt. It’s a vicious cycle.”

Van Reenen says there is a very real danger that the series of recent rates hikes – while coming off a very low base – will slow impetus across the property sector.

“Real estate is one of South Africa’s most robust industries right now, stimulating the economy and generating billions for the fiscus.

“As much as the Reserve Bank needs to protect the currency, it also needs to look after industries that drive the economy and look after its citizens, who have rights. Food and shelter are among them, and it’s not the government’s place to deprive people of those rights with crushing economic pressure.”

Lew Geffen Sotheby’s International Realty CEO Yael Geffen says the repo rate increase of 50 basis points is going to affect all South Africans.

“The hike wasn’t unexpected given the pressure on the economy, but it is yet another blow for consumers already battling record high fuel prices and food costs going through the roof since the Ukraine conflict began.

“South Africans are being squeezed from all sides and there just isn’t that much give in the economy.”

Geffen says with the increase now setting the prime rate at 8.25%, on a bond of R2 million (at prime) monthly home repayments will go up by more than R600.

“The housing market is still extremely buoyant, but buyers need to budget carefully. There will be at least one more rates hike this year, so purchases must be made with that in mind.

“Property is unequivocally one of the best long-term investments right now in a very uncertain world, but buy wisely and buy what you can afford. That’s how to maximise your investment in the long run.”

 

Last modified on Thursday, 02 June 2022 07:52

Most Popular

GMI Property Group adds a New Mall to its Stable: Bronkhorstspruit Mall

Jul 21, 2022
GMI Properties Group announces the development of the much-anticipated Bronkhorstspruit…

Equites Property Fund and Mabel conclude B-BBEE transaction

Jul 21, 2022
Andrea Taverna-Turisan
The JSE listed specialist logistics property fund, Equites, today officially announced…

The growing take-away and fast food, and food delivery, culture

Jul 20, 2022
Restaurant and Take-Aways data for May 2022
Restaurant and Take-Aways data for May 2022 points to “solid but slowing” growth in…

Despite hike, interest rate remains below pre-Covid levels, says Dr Andrew Golding

Jul 21, 2022
Dr Andrew Golding
With the inflation outlook deteriorating since the previous Monetary Policy Committee…

The rapidly rising cost of living is reflecting in residential rentals

Jul 21, 2022
TPN Graph-Rental Demand
Demand for residential rental properties saw some recovery in the first quarter of 2022…

Please publish modules in offcanvas position.