The South African Reserve Bank's (SARB) Monetary Policy Committee (MPC) has decided to keep the repo rate at 3.5% and prime lending rate at 7% after its third Monetary Policy Council meeting for 2021.
Lesetja Kganyago, SARB Governor announced during a press briefing on Thursday that "going forward, a stronger exchange rate, ongoing moderation in unit labour costs, and sustained economic slack are expected to offset higher electricity and food price inflation, keeping the headline inflation forecast relatively stable."
While many expected the interest rate to be increased after the previous meeting in March, the Monetary Policy Committee (MPC) cut the country a break with its decisions to hold, says Adrian Goslett, Regional Director and CEO of Remax of Southern Africa.
"This means that homeowners and first-time buyers continue to find themselves in a favourable position in terms of the interest rate charged on their home loan.
"Stock shortage swinging the market"
Goslett explains that these low interest rates have made owning a home a reality for many more South Africans, as the first-time buyers' market is still incredibly active.
"Owing to this increase in activity, we have already heard reports from some of our offices that there is a lack of stock available in their suburbs. It is possible that we are already beginning to see the swing from a buyer's into a seller's market, which means that we may soon start seeing prices begin their upward climb." says Goslett.
Having said that, any increases in interest rates over the course of this year could hinder house price growth.