First-time home buyers remain cautious despite rate cut

First-time buyers are cautious about entering the property market even after the interest decision by the central bank's monetary policy committee (MPC).

- Anathi Madubela

The SA Reserve Bank (Sarb) cut its repo rate by 25 basis points last Thursday for the third consecutive MPC meeting, bringing the benchmark rate to 7.5%.

The reduction takes South Africa's prime interest rate for commercial banks to 11%.

“We have seen with low income earners and first-time buyers that they have not been enthusiastic participants in the market,” says FNB senior economist Siphamandla Mkhwanazi.

“With interest rates coming down, slowly but surely we are seeing first-time buyers coming back into the market…but they are still cautious.”

In the first quarter of 2024, first-time home buyers accounted for 46% of the customer intake at ooba Home Loans.

“At this stage we should not expect the property market to shoot the lights out, because we are coming from one of the most significant cost-of-living crises we have seen in a generation,” says Mkhwanazi.