The Thembisan published this DebtSafe article about the rate hike which will impact negatively on the residential housing market, because with growing financial strain and rising costs of living expenses, a bond repayment will increase substantially.
South African consumers are in distress over the announcement by the SA Reserve Bank’s (SARB) governor, Lesetja Kganyago, of the repo rate increase to 6.25 percent.
Although the increase was expected because of the increasing strength of the US Dollar in the past few weeks, economists now warn consumers to slow down on their credit facilities. The governor said the main reasons for the increase include worsening drought conditions, increases in food prices and adjustments of electricity tariffs.
Wikus Olivier from DebtSafe says consumers will have to curb their reliance on credit. He adds that consumers rely too heavily on their credit facilities. People are even making use of unsecured payday loans to get through each month, putting them in even more debt every month.
The rate hike will impact negatively on the residential housing market though, because with growing financial strain and rising costs of living expenses, a bond repayment will increase substantially.
“Look at your spending habits; especially with the approaching festive season and financial responsibilities in the New Year,” he added.
“Good planning is key, and if you teach yourself and your family to do financial management and update your budget regularly, you will have an amount left over to put into an additional account where you can save your money for times when you need it.”