There will not likely be a change in the interest rate and the South African Reserve Bank (Sarb) Monetary Policy Committee (MPC) will likely keep the interest rates unchanged, according to Samuel Seeff, chairman of the Seeff Property Group.

The MPC will be making its interest rate announcement on Thursday, May 30, 2024.

From the July 2023 announcement until to date, the MPC has kept interest rates unchanged at 8.25%.

At the start of 2023, the MPC announced the interest rates went from 7% to 7.25%.

This was followed by two successive 50 bps increases in March and May, respectively, where interest was announced as 7.75% in March and then 8.25%.

Johann Ellis, Group Chief Economist, Old Mutual Group said that the Sarb is concerned about inflation expectations which could prevent any immediate cuts this week.

According to Ellis, the recent weeks have seen significant strength in the rand which further complicates the decision making process for the Sarb.

According to Seeff high interest rates have had an effect on the South African economy, as well as an impact on households in the country.

“The high interest rate has had a dampening effect on the economy and household budgets with significant further impacts on households and the economy,“ Seeff said.

“It has been too high for too long and has not only affected demand in the property market, and affordability of property, but the banks are signalling that property owners with home loans are struggling.”

According to Thys van Zyl, CEO of Everest Wealth, interest rates have increased by 475 basis points since November 2021 and have remained unchanged for the past few months.

Van Zyl said that consumers will continue to be under great pressure with less disposable income but more debt repayments and rising living costs to take care of.

“The average salary in the country is also not increasing at the same rate and is therefore not enough to counter inflation, and South Africans are getting poorer and poorer,” Van Zyl said.

“Consumers must guard against taking on further debt unnecessarily, using credit cards recklessly, living beyond their means, and should think twice about every rand spent.”

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa said that if people are feeling they are unable to get by without an interest rate cut in May then it would be prudent to speak to your bank.

Goslett also suggests that people reach out to a real estate agency to discuss their options, like renting their home to help bring in extra income, or other solutions you might not have considered yet.

“Even if the announcement on the 30th shocks us all and ends up being cut, it is still better to be prepared and have a strategy in place in case rates don’t change, or worse still, they happen to increase,“ Goslett said

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