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Paying off a house just got a little bit more expensive in light of the latest repo rate hike of 75 basis points – making renting a place more attractive.
Yael Geffen. the CEO of property giant Lew Geffen Sotheby’s International Realty said that both property owners and consumers as a whole face a bleak festive season and an even bleaker start to the new year in terms of paying off monthly bonds.
“The latest rate hike means homeowners with bonds of R2 million – which in today’s market isn’t by any stretch big – will have seen an increase of nearly R4,500 in their monthly repayments in one year.
Geffen said: “If there ever was a time for a hard-line economic turn-around strategy, it’s now because the long-term plans rolled out so far haven’t produced much for South Africans on the ground, except for longer periods of load shedding.”
Geffen says the property sector is a significant contributor to the economy, and while the government needs to hedge against inflation, it also needs to protect its populace from plunging into poverty.
“The unvarnished truth is that this isn’t going to be easy for homeowners, who are going to have to make hard budgeting decisions. Despite this, first prize always is to hang onto your home.
“The one massive positive is that property always has been and will remain one of the safest investments you can make. Buyers should make certain, though, that they’re not purchasing at the top of their budgets; there should always be some wiggle room for rate increases.”
BusisnessTech looked at what South Africa offers in terms of a 1 bedroom apartment:
Johannesburg
1 bedroom apartment to rent in Houghton Estate – R12,000
Cape Town
1 bedroom apartment to rent in Sea Point – R12,000
Pretoria
1 bedroom apartment in Menlyn – R11,880
Durban
Gqeberha
Read: How much more you will pay for your bond this month after the latest interest rate hike
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