News
Are we at the top of the cycle and what does the future hold?
December 5th, 2008
Although times are tough in the property industry, it is important to realize that South Africans across all sectors are feeling the pinch. Inflation has been the key factor in determining the level of interest rates.
The South African Reserve Bank uses interest rates as its most significant tool in combating inflation. In other words, as inflation increases, the South African Reserve Bank increases the repo rates, which result in an adjustment to the prime interest rate. Needless to say, these increases have left a heavy burden on South Africans, especially homeowners.
The good news though, is that Quince has made a decision to help property owners and estate agents by not increasing our bridging finance rates. We have kept our rates at a steady 3% interest rate per month over the past two years and are therefore taking the “punch” on behalf of our clients.
But while it would appear that inflation has now peaked and most analysts expect the next rates move to be down, no one is too sure as to when exactly this will happen. But the general consensus amongst economists is for rate cuts to start at the latest in April 2009.
Unfortunately the outlook for 2009 property market remains bleak. Absa has warned that the property pain is set to continue into 2009 and said the housing market has cooled off “to levels not seen in many years”. But while the outlook doesn’t look too rosy, Quince will do everything we can to keep our rates at the current 3% rate per month for as long as possible. Demonstrating our commitment to offering our clients some relief in these uncertain times.
Although times are tough in the property industry, it is important to realize that South Africans across all sectors are feeling the pinch. Inflation has been the key factor in determining the level of interest rates.
The South African Reserve Bank uses interest rates as its most significant tool in combating inflation. In other words, as inflation increases, the South African Reserve Bank increases the repo rates, which result in an adjustment to the prime interest rate. Needless to say, these increases have left a heavy burden on South Africans, especially homeowners.
The good news though, is that Quince has made a decision to help property owners and estate agents by not increasing our bridging finance rates. We have kept our rates at a steady 3% interest rate per month over the past two years and are therefore taking the “punch” on behalf of our clients.
But while it would appear that inflation has now peaked and most analysts expect the next rates move to be down, no one is too sure as to when exactly this will happen. But the general consensus amongst economists is for rate cuts to start at the latest in April 2009.
Unfortunately the outlook for 2009 property market remains bleak. Absa has warned that the property pain is set to continue into 2009 and said the housing market has cooled off “to levels not seen in many years”. But while the outlook doesn’t look too rosy, Quince will do everything we can to keep our rates at the current 3% rate per month for as long as possible. Demonstrating our commitment to offering our clients some relief in these uncertain times.