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!
2020 is off to a great start – at the first meeting of the South African Reserve Bank’s 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%.
What is The Repo Rate?
The 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’s main purpose is to stabilise our currency and economy, so implementing a higher repo rate can be used to slow inflation.
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’t 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.
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.
What does this mean for homebuyers?
A 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.
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!
What are the benefits of buying right now?
First-time homebuyers and investors can apply for a loan at a lower interest rate than before.
Owning your own property also comes with the benefits of security and the freedom to control one’s 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:
- Location: Know where you want to live before you start looking for a home; and if you’re looking to start a family, or already have one, factor things like the schools you’d like the kids to attend, proximity to malls and other attractive amenities.
- Research: Have an idea of the average price of a property in the area you’re looking to live in. If unsure, always ask your agent.
- Beware of the “hidden“ costs: Speak to your agent and know exactly what added costs there are to ensure that you’re financially prepared for transfer fees, conveyance fees, rates and taxes that you might need to pay for.
- Don’t ever rush into buying: Take your time when looking to buy, don’t ever let your seller or agent rush you into buying something that you’re not sure of.
Read here for more tips on making your first purchase: http://bit.ly/3awHgSn.
Reeflords Property Development has had an incredible 2019, and 2020 seems just as promising; with an ever-growing property portfolio – let us walk with you as you journey to buying or investing in your first property!
Visit our Urban Tana Show House Open Day!
Ready to meet your dream home at Urban Tana? Then be sure to join us for our family-filled Open Day!
When? 22 February 2020, from 11am to 3pm
Where? Urban Tana, Nanyuki Rd and Tana Rd, Sunninghill
What to expect? The opportunity to view our new show house, with refreshments available and so much more!
Plus, this Open Day will feature entertainment for the whole family, early-bird discounts for buyers that are only available on the day and spot prizes up for grabs!
For more details contact email@example.com
Visit https://reeflords.co.za/urban-tana/ to find out more.