Lew Geffen Sotheby’s International Realty CEO Yael Geffen says the Monetary Policy Committee’s (MPC) decision to keep the repo rate unchanged at 8.25% is “expectedly disappointing”.
WORDS & PHOTO: SUPPLIED
Geffen goes on to say, “This means the prime lending rate will have been at a15-year high of 11.75% for more than a year, because the current rate was set by the MPC at its May 2023 meeting, and consumers have had no relief since.
“Economists have been saying for some time that we were unlikely to see an interest rate cut this month.
“But like Monty Python’s Spanish Inquisition, what wasn’t expected was Reserve Bank Governor Lesetja Kganyago’s strong indication that the repo rate probably wouldn’t come down at all this year.
“In fact, we might have to wait for Q2 2025 for any loosening of the debt noose that’s been strangling consumers for the past few years. For a time during the Covid pandemic, the repo rate was 3.5%.
She adds: “It’s now at an eye-watering 8.25% while headline inflation has sky-rocketed, hundreds of thousands of jobs have been lost and consumers debt is at record levels.”
Moving the goalposts
Geffen says the citizens in Team SA will ultimately be the losers if the MPC keeps moving the goalposts, but on the plus side, in the short-term the outlook for the property market is more positive.
“The pre-election jitters that have created volatility in the market in recent months will settle in the second half of the year, and more investors will show more optimistic sentiment.
“There is also likely to be an increase in residential sales in the second half of the year, with market activity intensifying further next year when the repo rate eventually comes down.”
