Will your home loan repayments decrease in July?

Every time the MPC is set to meet, South Africans wait in bated breath to hear if their debt repayments will finally become easier to manage following a much-anticipated interest rate cut. After the markets responding positively to the new Government of National Unity, it remains to be seen whether that relief will come this month or not.

“It is difficult to predict what the MPC will do at this meeting at the end of July,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “and while I am optimistic that an interest rate cut might come soon, I would caution homeowners not to get their hopes too set on this,” he advises.

Many experts are predicting that interest rates will hold steady in July and are likely to drop by 25 basis points at the September meeting only. The latest inflation stats are unchanged from April at 5.2% in May. It might take a few months before inflation drops closer to the MPC’s target of 4.5%. Only then are we likely to experience our first interest rate cut.

“The fact that the markets are responding positively to the GNU makes me optimistic for economic growth and, as a by-product, growth in the real estate market too. The positive global response to the GNU is also likely to have a positive impact on the local housing market, as it makes South Africa seem more stable and appealing to foreign investors. It all depends how long this positive sentiment will last. The outlook can change quite quickly depending on how the political landscape evolves,” Goslett notes.

“We are living through interesting times at the moment. I remain cautiously optimistic for what lies ahead and am hopeful to see more positive trends emerge within the local housing market as the year progresses,” he concludes.

Writer: Kayla Ferguson