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.”