{"id":7877,"date":"2020-02-07T08:02:17","date_gmt":"2020-02-07T08:02:17","guid":{"rendered":"https:\/\/reeflords.co.za\/?p=7877"},"modified":"2021-02-20T13:00:15","modified_gmt":"2021-02-20T11:00:15","slug":"this-is-the-time-to-buy","status":"publish","type":"post","link":"https:\/\/reeflords.co.za\/?p=7877","title":{"rendered":"This Is the Time to Buy!"},"content":{"rendered":"

The days of could have, should have, would have are finally over! With the recent announcement of the prime rate dropping to 9.75%; there has never been a better time to buy property!<\/p>\n

2020 is off to a great start – at the first meeting of the South African Reserve Bank\u2019s Monetary Policy Committee (MPC), it was voted unanimously to reduce the repo rate by 25 basis points from 6.5% to 6.25%; resulting in the prime lending rate dropping from 10% to 9.75%.<\/p>\n

What is The Repo Rate?<\/strong>
\nThe repo rate, also known as the repurchase rate, is the set rate at which the South African Reserve Bank (SARB) lends money to other banks. The banks, in turn, lend money to their clients. The Reserve Bank\u2019s main purpose is to stabilise our currency and economy, so implementing a higher repo rate can be used to slow inflation.<\/p>\n

So, how does this affect property prices? When the repo rate rises, so do property prices, making it more expensive to buy a home or invest in property, simply because one doesn\u2019t have the same buying power. So, when the repo rate drops, so do property prices, interest rates, and your chances of being given a fair and affordable loan.<\/p>\n

In fact, many potential buyers and investors will even wait for interest rates to drop, in the hopes that they will get more value for money when buying property.<\/p>\n

What does this mean for homebuyers?<\/strong>
\nA low-interest rate encourages consumer spending. It makes sense to buy a house now because the interest payments made on the loans are lower and the total payment more affordable.<\/p>\n

The decision will have a significant impact on the housing market, with the cut providing further relief to homeowners who were struggling to keep up with monthly repayments and encouraging first-time home buyers and\/or investors to take on debt with the low-interest rates introduced. Prices are flat, sellers are open to negotiating and banks are prepared to give loans – the time to buy or invest is now!<\/p>\n

What are the benefits of buying right now?<\/strong>
\nFirst-time homebuyers and investors can apply for a loan at a lower interest rate than before.<\/p>\n

Owning your own property also comes with the benefits of security and the freedom to control one\u2019s own environment, whereas, with renting there are restrictions that come with the property.Now that we know what the repo rate is and the benefits of buying in this current economic climate, here are some tips to consider before making that first purchase:<\/p>\n