The SA Reserve Bank, like other central banks around the world, is keen to maintain a balance between economic growth and inflation as the economy recovers from the damage done by the Covid-19 lock-downs and supply chain breaks, so some interest rate increases can be expected this year, says Berry Everitt, CEO of the Chas Everitt International property group.
US Federal Reserve governor Lael Brainard said interest rates could be raised as early as March to ensure price pressures are brought under control, while Fed governor Christopher Waller said that three interest-rate increases this year was a good baseline, Bloomberg reported. “What is more, the demand that was initially largely being driven by first-time buyers has had a knock-on effect right across the market, with many repeat buyers now choosing to move as well – and often to upgrade, thanks to the still-low interest rates and the ready availability of bonds for qualified buyers,” said Everitt.
“Rising unemployment is also a very real concern for the market as a whole. However, we see no reluctance on the part of the banks to grant home loans to those who do qualify – in fact, quite the opposite – so what we anticipate is that keen buyers will simply adjust and start purchasing smaller homes or in less expensive areas.”
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