Lew Geffen Sotheby’s International Realty CEO Yael Geffen says a rates hike was expected, but imposing a 75 basis points increase on consumers will be devastating.
“This is the highest single rise in nearly 20 years; putting massive pressure on South Africans who are already dealing with huge increases in the basic cost of living and the previous rates hikes already imposed this year.
“The effect will be even worse for mortgage holders. What this increase means for home buyers in the R2 million range is a monthly repayment rates hike of nearly R1 000, or some R3 000 since November last year.
“We always advise buyers not to over-extend themselves when they purchase property. It is financially responsible to leave room in the budget for repo rate increases, but increases at this level are untenable for salaried households living on fixed income.”
Geffen says the real estate sector has rebounded spectacularly since 2020, but momentum will slow given that more rates increases are predicted for the remainder of the year.
“The Reserve Bank is responsible for keeping inflationary pressure down and protecting the currency, but at the same time it has a responsibility to ensure economic sectors that contribute so significantly to GDP are protected as well.
“The only good news right now is that house prices are not going to come down, so those who are in the market to buy should get in now. Just ensure that you’re buying with some room to manoeuvre in your budget.”