At this stage, the SARB is likely to keep interest rates unchanged at current levels, mainly because the rand has held relatively well since the cabinet reshuf? e and ratings downgrades. However, the SARB may also opt to hike, by another 25 basis points, if the rand comes under renewed pressure. Possible triggers are an adverse turn in global dynamics, renewed domestic political turmoil or further ratings downgrades. Nedbank believes that rate cuts will be off the table in 2017. The company also doesn’t expect any interest rate cuts this year; the ?rst cuts should happen only in the ?rst half of 2018. In the meantime, it will be a case of weathering the storm. Hiked interest rate levels will hurt households. Many of us are still struggling with high debt burdens. Household income has been under pressure for the past three years – partly due to higher unemployment, higher taxes and rising in?ation. Household con?dence has also been affected – in an uncertain political environment, consumers are more conservative in their spending patterns, avoiding credit and big ticket purchases.
THE LIKELY EFFECT ON RESIDENTIAL PROPERTY
Demand for mortgages and housing could drop in 2017. The South African property market may only experience some recovery in volumes and prices later in 2018 as interest rates ease and household con? dence and spending starts to accelerate. It will be a case of waiting it out.
“The economic implications depend on how the ratings downgrade impacts the rand, inflation and interest rates”
HELP YOUR CLIENTS UNDERSTAND AFFORDABILITY
The Nedbank Instant Bond Indicator can help customers who are not yet ready to purchase a property but have started looking for a home. They don’t have an Offer to Purchase in hand, but they’re seeking a good understanding of what Nedbank will be able to give them as far as a loan is concerned. The Instant Bond Indicator is designed to give your clients a real-time scoring on their credit and affordability. Only then can they start to make a meaningful search for a home.
Found on http://propertyprofessional.co.za/