The repo rate has dropped – but how does that impact your ability to buy or sell property? Experts share insights.
Rate cut welcomed, but economy needs more, says Seeff
Welcomed, but the economy needs more, says Samuel Seeff, chairman of the Seeff Property Group, following the interest rate cut of 25bps announced today by the Reserve Bank.
This is the fourth rate cut by the Reserve Bank since the latter half of last year and reduces the repo rate to 7.25% (from 7.50%), and the prime rate to 10.75% (from 11%). Seeff, however, believes the Bank missed a crucial opportunity to provide a more meaningful cut of at least 50bps as a vital boost for the economy, consumers and the property market.
The conditions for a robust rate cut are ideal given the remarkably low inflation which, despite the recent benign increase to 2.8% is still comfortably below the SARB's 3-6% target range. Additionally, despite global volatility, the strengthened Rand poses no risk of igniting an inflationary spiral, given the subdued demand-side pressures.
Seeff says that at this pivotal juncture, there is nothing more critical right now than economic growth and job creation. Lowering borrowing costs would stimulate business investment and crucially, put more money back into the pockets of consumers, thereby boosting spending.
