Owen Dormehl, CEO of Dormehl Property Group says “Fantastic news, the age of miracles is not yet over! The Reserves Bank's decision to reduce the rate by 50 basis points is a very welcome unexpected gift and it will definitely provide a positive stimulus to assist the real estate market's delicate recovery which appears to be taking place”.

Rate cut of 0.5% welcomed

Standard Bank, Absa and First National Bank will decrease their prime rate, the retail banks said on Thursday.

This followed an announcement by SA Reserve Bank (SARB) Governor Gill Marcus that the Monetary Policy Committee had decided to trim the repo rate by 50 basis points to 6,5 percent.

Standard Bank would decrease its prime and home loan base lending rates from 10.5 percent to 10 percent on Friday.

"These rate changes apply to new and existing clients," the bank said in a statement.

Absa said that due to market conditions and the decrease in the repo rate, it would decrease its prime overdraft rate by 0,50 percent to 10 percent from Friday.

Absa's mortgage rates would also be reduced to 10 percent on Friday.

FNB said it also would cut its prime lending rate by 0.5 percent from 10.5 percent to 10 percent.

"The new interest rate will be applicable to all new and existing prime linked loans, including home loans, from Friday March 26 2010," the bank said in a statement.

"The cut takes us to historically low rates last seen in 1981," said FNB chief executive officer Michael Jordaan.

"We have already noted a material improvement in consumer confidence," he said.

"This, together with 2010 Fifa World Cup -- which is only 77 days from kick-off -- augurs well for the rest of 2010," Jordaan said.- Sapa

Article from: www.dpgprop.co.za