No change in SA interest rate
South Africa real estate owners were relieved to hear the decision from the Reserve Bank’s Monetary Policy Committee to leave the repo rate unchanged at 5.5 per cent.
The decision to leave the interest rate unchanged had been expected by most economists due to the high level of national debt. The Government are concerned at the size of household debt to annual income which is running at more than 78 per cent so the choice not to cut the rate is seen as a way of curbing consumer spending.
Sales of property in South Africa are lower than many experts would anticipate but to increase the cost of finance at this time would severely harm the already struggling property markets.
Forecasters suggest house prices are not expected to change much in the months ahead and until lending conditions improve real estate sales are expected to remain subdued.