The repo rate will increase by 25 basis points to 3.75%, South African Reserve Bank (Sarb) governor Lesetja Kganyago announced explained today, which means that the prime lending rate of commercial banks will increase to 7.25%.
For the past few months, we have had very favourable lending conditions and the property market has been highly active with many of our regions reaching record highs.
Although the economy has experienced an unpredictable climate during COVID reducing the interest rate to a forty-year low made a huge impact on the buoyancy of the market. Despite uncertainty around rising costs and inflation we caution the government to keep the interest rate within this range to assist in easing consumer budget tension.
Taking all of the current factors into consideration this increase of 25 basis points still favours the property market and should not affect buyer and lending appetite in a big way.
Statement by
Richard Gray
Harcourts SA CEO