Lowest interest rate in 47 years creates rare opportunity for buyers

Jul 24, 2020 9:13:48 PM

Harcourts South Africa welcomes the announcement by The South African Reserve Bank (Sarb) to cut interest rates by a further 25 basis points, creating a rare opportunity for real estate investors and buyers in general. This takes the total cut in 2020 to 300 basis points, lowering the repo rate to 3.5% and the prime lending rate to 7%. The lowest rate implemented by the Bank in almost 47 years.

The effects on the economy by the COVID-19 pandemic has been difficult for many consumers and businesses and this cut will help alleviate some of the pressures South Africans face. The Bank currently expects GDP in 2020 to contract by 7.3%, compared to the 7.0% contraction forecast in May.

The man on the street is certainly bearing the brunt of an economy facing serious obstacles and as the long term effects remain unclear at this point, the announcement today will help many consumers breathe a sigh of relief.

Sarb explained that the easing of the lockdown has supported growth in recent weeks and high-frequency activity indicators show a pickup in spending from extremely low levels. However, getting back to pre-pandemic activity levels will take time.

We acknowledge that we have been faced with an enormous health crisis and that financial markets and the economy remain turbulent. However, we continue to remain positive about the real estate sector and its ability to grow even in the most uncertain times. 

 

Statement by
Richard Gray
CEO Harcourts South Africa

Topics: Richard Gray, Harcourts South Africa, Interest Rates, Buyers and Sellers, COVID-19