Consumers waiting for an interest rate cut have, in all likelihood, an even longer wait ahead, with most experts now changing their predictions for a rate cut only towards year-end (if at all) instead of their previous mid-year predictions.
There has been a string of bad news mostly related to inflation pressures following the last interest rate announcement that leaves little to no hope for an interest rate cut to occur at the next meeting scheduled for 30 May 2024.
In fact, some even think that there is a possibility of a 0.25% hike.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, said that this will be a hard knock for the real estate market, as many homeowners have been struggling to keep up with their bond repayments at the current level and are anxiously waiting for an interest rate cut to bring some relief.
My advice to those who are struggling to keep up with their repayments is to reach out to the bank for assistance before things get too out of hand. It now seems probable that a small interest rate cut might only occur at the end of the year, so its no longer a matter of waiting a month or two for the situation to improve. The longer you go without addressing the issue, the harder it will be to make a full financial recovery, Goslett said.
If you catch the situation early enough, Goslett explains that your financial institution will likely be willing to add you to their bank-mandated sales programme.
In these sorts of sales, the mortgage-holder usually volunteers to have the bank put the house on the market to recover the rest of the debt owed rather than attempt to catch up on the payments.
In these cases, homeowners may still reject offers they deem too low, which gives the homeowner a better opportunity to recoup their losses and gain a fresh start.
If youre feeling like you are unable to get by without an interest rate cut in May, then it would be prudent to speak to your bank or reach out to a local RE/MAX Office to discuss your options there might be ways for you to rent our your 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 a cut, it is still better to be prepared and have a strategy in place in case rates dont change, or worse still they happen to increase, Goslett further added.
