Consumer confidence is key to purchase & investment in property residential market.
Interest rates remainder fairly static until June 2019 when they were cut by 25 basis points (from 6,75 to 6,5%) and experts at the time were split in their opinions…some saying that it was a great step in the right direction and would boost sales in the industry and others commenting that they didn’t feel that it was enough…the Govt. should have been bolder and reduced it more.
In January 2020 it went down a further 25 basis points (to 6,26%) and then in In March 2020 it went down a further 100 basis points (to 5,25%) followed by another reduction of 100 basis points (to 4,25%) in April 2020 where it currently sits.
A reduction of 250 basis points over these 10 months equates to a reduction of R 1640/month per R 1M of bond repayment.
The residential property market has been static during all this time, so now, with reduced prices and an extremely positive borrowing environment buyers are offered the best opportunity in recent history to obtain excellent value for long term value gains at low repayment rates.
It encourages “wait and see” potential buyers to take the plunge and first time buyers will probably never have a better opportunity to get into the residential property market.
Repayment per R 1M borrowed is R 8209, registration cost approx. R 30k
So repayment of a 100% bond on our One bed units on the cheapest plot would cost from R 15343/month
It also sends a message to foreign investors and Governments alike that SA is filled with opportunity, potential and investment possibilities.