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Real estate agencies welcome interest rate cut

Real estate agencies have welcomed the South African Reserve Bank’s latest decision to cut interest rates by 50 basis points.

Outgoing governor Tito Mboweni made the announcement on Thursday after the bank’s Monetary Policy Committee met for two days this week.

The interest rate has been cut by a cumulative 500 basis points since December last year. The repo rate, the rate at which the central bank lends money to commercial banks, currently stands at seven percent.

The chief executive of Jawitz Properties, Herschel Jawitz, says any cut will take pressure off existing homeowners and their monthly repayments.

“From a consumer confidence point of view it’s another welcome boost to consumer confidence which is at low levels and I think in terms of residential property consumer confidence plays a huge part in driving our market.”

Jawitz says property is now becoming more affordable.

“From an affordability point of view with property prices at a three or four year low and interest rates continuing to fall, property is becoming more and more affordable and that bodes well for the medium and long term recovery of the property market and property price.”