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JEREMY MAGGS: A warm welcome and let’s start with this. The South African Reserve Bank [Sarb] announcing that the repo and prime lending rates will again be left unchanged at 8.25% and 11.75% respectively. Rhys Dyer, chief executive officer of ooba Home Loans, says attention should now be focused on rate cuts to ensure pressure on household finances and further motivate prospective home buyers in, what he terms, a sluggish economy.
He joins us now, and given that you believe rate cuts could motivate prospective home buyers in this stagnant economy, firstly, how significant a drop in rates would make a marked difference?
RHYS DYER: Jeremy, so when we went into that Covid period and rates dropped fairly significantly, as you recall, down to 7%, we saw an increase in our demand or application increase probably in the region, about 40-odd percent at those levels of interest rates. So it [the property market] is very, very sensitive to interest rates.
Already we’ve seen, even when… there’s been a pointer towards interest rates holding, many, particularly first-time home buyers, have decided to come back into the market, with a little bit of confidence that their repayment hopefully is not going to get any more expensive. So they’ve reached the top of the cycle. So it is very interest sensitive, but I think it’ll need another 1% or 2% to really get the property market stimulated again.
JEREMY MAGGS: Not necessarily realistic, though, in the current economic climate.
RHYS DYER: No, I think that’s correct. I do think that, I’m not an economist, but certainly all the people we speak to do