Property News You Can Use presented by Harcourts

Looking at all the indicators, consumers should prepare for another rate hike of around 0,5%, taking the prime lending rate to 8,75%. 

Even though this is still much lower than the 10% prime lending rate before the pandemic, it will definitely put a lot of pressure on the abilities of property practitioners to sell property. However, we must remember that the prime lending rate will still be in the single digits. This gives homeowners ample opportunity to invest in property as a long-term investment.

Past history has proven over and over again that South Africa’s property market remains a sound investment option, especially during challenging times. 

Due to our harsh economic conditions, we are moving back into a ‘*black swan’ period. This includes the ever-increasing fuel prices and electricity load shedding schedules that are incredibly disruptive for businesses suffering. This shortly after the pandemic makes conditions very tough for all South Africans.

According to Absa, homeowner sentiment suggests that the property market remains robust despite the economic headwinds. A positive sign for the long-term sustainability of the property market is that there is plenty of movement, with people buying and selling to adapt to their changing needs.

The consumer should invest any spare money into your home loan to reduce the repayment period and the interest you will be paying in the long term. Keeping the repayment steady when the rate drops is one way to build equity. The sooner you can pay off your home, the higher the capital value and equity you can accumulate. So irrespective of the outcome of this month’s Monetary Policy Committee meeting, financial discipline is more important than ever before.

A black swan is an unpredictable event beyond what is typically expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and widespread insistence that they were obvious in hindsight.

 

— Marsha