Further repo rate cut would have provided relief for economy and boosted housing market, says Dr Andrew Golding.

With the interest rate at its lowest in decades, after the welcome announcement today of a further 25 basis points drop in the repo rate, it may now be more financially prudent to buy rather than rent a home.

The further reduction of the repo rate by 25 basis points to an all-time low of 3.5% takes the prime interest rate down to 7%, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

Property in the Western Cape is regarded by many as among the most expensive in the country, and for first-home buyers, often completely out of reach. 

Experts are divided on whether the South Africa Reserve Bank (SARB) Monetary Policy Committee (MPC) will hold or decrease the repo rate later this month, according to Finder’s panel of 11 experts.

In the midst of a rapidly contracting economy in limbo under an extended lockdown, today’s (21 May 2020) announcement of a further reduction of 50 bps in the repo rate will have a positive effect on the residential property market, albeit deferred until potential buyers can begin transacting in earnest, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

The South African Reserve Bank (SARB) has cut the Repurchase (repo) rate by 50 basis points.

A slowing capital growth trend, into negative territory by 2019, has been in play in recent years. The Corona Crisis is likely to add momentum to this correcting trend in 2020.

“In an unexpected but welcome announcement, the Monetary Policy Committee today (14 April 2020) announced a further 100bps cut in the repo rate, reducing it to just 4.25%.

The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) has cut the interest rate by 100 basis points.