- November 4, 2024
- Posted by: vitalclick
- Category: Property & Real Estate
On Thursday, 21 November 2024, the Monetary Policy Committee will deliver its decision regarding the interest rate. With South Africa’s inflation easing and global central banks cautiously beginning rate cuts, the overall sentiment is that there is likely to be a further cut of around 0.25%.
Source: 123RF.
A further cut would be most welcomed, but consumers are cautioned not to expect interest rates to dramatically lower within the near future. As promising as the inflation numbers look now, the long-term outlook remains uncertain and the repo rate is largely predicted to stay above pre-pandemic levels of around 6-7% through 2025.
Adrian Goslett, regional director and chief executive officer of Re/Max of Southern Africa, says that while we cannot be certain how far interest rates will drop, homeowners and buyers should remain cautious but optimistic.
“A further rate decrease will undoubtedly offer greater temporary relief, but the property market’s recovery is likely to be slow and will depend on broader economic conditions and consumer confidence.
“Buyers and sellers will need to weigh up both the opportunities that exist within the current market as well as their long-term financial plans to decide how best to proceed given the current market,” Goslett recommends.
Prepare and guide
As real-estate agents anxiously await the November interest-rate decision, Goslett’s advice is to focus on proactive communication with clients. “If rates drop, it could lead to increased buyer activity, so agents should be ready to guide buyers through the home-loan process.
“However, if rates remain steady, helping clients understand the long-term benefits of buying now – before property prices potentially rise further – will be key. Flexibility, market knowledge, and maintaining client confidence will be crucial in either case,” he states.
For buyers, patience and preparation are key. Goslett explains that if interest rates drop further in November, it may create opportunities for lower monthly bond repayments. However, even if rates stay the same, it’s still wise to act, as property prices will continue rising regardless.
“The best time to buy or sell a home is when you’re financially ready, regardless of market conditions. Timing the market perfectly is difficult, but owning property remains one of the most reliable ways to build long-term wealth.
“While potential interest-rate cuts may benefit buyers and sellers in the short term, ultimately, real estate is a long-term investment, and waiting too long could mean missing out on current opportunities,” he concludes.