November SARB Interest Rate Decision and the Main Implications for Property Markets
SARB hikes rates by a further 75 basis points, in an attempt to reign in consumer inflation that remains well-above the Bank's upper target limit. Cumulative hiking of 350 basis points since late-2021 is expected to broaden the near-term property demand slowdown, while sustaining the downward pressure on real property values. The Residential Rental Market could continue to receive some mild support, however.
Further interest rate hike, along with lagged impact of past ones, is likely to sustain slowing commercial property market trend into 2023
Today (24 Nov), the SARB decided to hike its policy repo rate by a further 75 basis points in response to an earlier inflation surge that has left CPI (Consumer Price Index) inflation at 7.6% year-on-year as October. The inflation surge has been largely driven by a global oil price spike that caused domestic petrol prices to rise sharply earlier in the year, along with a globally influenced food price inflation spike. Much of this has to do with the Ukraine conflict and the supply uncertainties for fuel and food that this created.
07 Dec 2022
Author FNB - John Loos
