05/06/2024
Still no easing of interest rates for consumers
In the same week that South Africans went to the polls to vote in the country’s seventh democratic elections, the Reserve Bank Monetary Policy Committee (MPC) has announced yet another hold on interest rates. This means that the prime interest rate remains at 11.75%.
“At the beginning of the year, we were hopeful that the Reserve Bank would begin its cutting cycle in the first half of 2024,” says MortgageMax CEO, Jors van Niekerk. “Unfortunately, this has been delayed as a result of the uptick in consumer price inflation in January and February. And the Reserve Bank has been clear that until inflation is sustainably within sight of the midpoint of its target range at 4.5%, interest rates will remain unchanged. This will be difficult news for South African consumers to hear as they continue to stretch their budgets to meet the rising cost of living,” he adds.
Some good news, however, is that inflation appears to be on a subtle downward trend for the moment, having dropped to 5.3% in March and 5.2% in April. What’s more, many economists and industry experts remain cautiously optimistic that we will still see at least one interest rate cut this year.
“Now is not the time for aspiring homeowners to give up on their home dreams. There is light at the end of the tunnel and the goal of homeownership is always one worth pursuing because of its many significant benefits. Not only are homeowners able to actively invest in their financial futures, but they are also in a position to create a safe, stable and secure environment for their families and to leave a legacy for the people they love when they are no longer around to take care of them. At MortgageMax, we believe that homeownership has the power to change lives and that’s why we’re committed to helping even more South Africans realise their homeownership dreams,” concludes Van Niekerk.