The repo rate remains constant at 3.5 %
Category Property news
Yesterday, it was announced by the South African Reserve Bank (SARB) that the repurchase rate (repo) will remain the same. This comes after a unified vote from the Monetary Policy Committee (MPC).
According to Lesetja Kganyago, SARB governor, the decision was taken due to the "balanced economic outlook and inflation rate." Currently, the prime commercial lending rate stays at an all-time low of 7%.
The repo and prime lending rates create a credit demand that should assist the economy in recovering from the COVID-19 pandemic. The vaccine rollout has been less than perfect, but it is starting to gain momentum. This could result in some growth in sectors adversely effected by the COVID-19 outbreak. At present the economy is forecasted to grow by 4.2%, due to improved trade in quarter one.
The current societal unrest could have negative effects in the investor confidence. This is dependent on how the current crisis is resolved, hopefully stringent measures are put in place to restore investor confidence and boost employment rates.
Nonetheless, it remains a buyer's market for property with the low repo and prime lending rate. Some economists suggest that SARB could cut rates by 25 or 50 basis points. The current rates are still favourable, and it should be seen as a step towards recovery and growth in South Africa.
Sources:
Author: Tamzin Warden
