The news that on top of the latest 0.75 percent interest rate increase by the Reserve Bank, bigger rate hikes could follow is particularly concerning for the property market.
This is according to Samuel Seeff, chairman of the Seeff Property Group, who says: "While we understand the need for a rate increase, we believe that a 50bps hike could have been adequate. It may appear easy to say let’s fight inflation with an interest rate hike, but this may not have the desired effect as we are not talking about demand-driven inflation, but mostly imported inflation caused by external factors (oil prices, Russia-Ukraine War, and so on).
Consumers are now having to absorb the higher-than-expected rate hike on top of significantly higher costs of fuel, food, and living. Seeff warns that the side effect of bigger rate hikes will impact many industries including real estate.
Seeff says the decision as to whether to fix your interest rate depends on the individual. He says that in his over 38 years in the industry, the interest rate averaged around 12% to 16%.
Thus, at 8.25% and even taking it back to the 10% level where it was prior to the onset of the Covid-19 pandemic is still well below the average.
READ: Brace for even higher repayments on your home loan
For those already scraping the bottom of their financial barrel, however, Tony Clarke, MD of the Rawson Property Group says different strategies may be required.
“If you’re concerned about future affordability, the first thing you need to do is talk to your lender,” he says. “Most banks are very open to finding mutually beneficial solutions to assist bondholders over tough times – as long as they’re given fair warning. This is not one of those situations in which it’s better to ask forgiveness than permission. Options tend to shrink dramatically if you’ve already defaulted on your loan.”
The following are a few of the most popular residential listings on Property24, which cover a wide range of listing types.
1. Starting up fresh in Sandton for R620 000
This modern studio apartment in Fourways offers amazing views of the estate, one bedroom, one bathroom, a covered balcony, 24-hour security, a clubhouse with a sparkling pool, and a double tennis court.
Click here to view.
2. A serene sanctuary in East London for R1.695 million
This picture-perfect family home in Beacon Bay ticks all the boxes for easy family living. The home offers four bedrooms, three bathrooms, a pool, and a built-in braai.
Click here to view.
3. Charm and modern character in Cape Town for R1.8 million
This home is set in a quiet crescent in Plumstead and is within walking distance of all amenities. Features include three bedrooms, one bathroom, a fully-fitted kitchen, and large patio.
Click here to view.
4. Living large in Goodwood for R1.855 million
This home in Townsend Estate offers space for the whole family. It offers four spacious bedrooms, two bathrooms, a braai area, and stunning Table Mountain Views.
Click here to view.
Find out how much bond you qualify for with the Property24's easy-to-use calculator tools
Want all the latest property news and curated hot property listings sent directly to your inbox? Register for Property24’s Hot Properties, Lifestyle and Weekly Property Trends newsletters or follow us on Twitter, Instagram or Facebook.
Print
