SA Consumers need an immediate rate cut

SA Consumers need an immediate rate cut

Interest rates need to be cut by 1% immediately to help already overburdened consumers, kick start the stricken property market and restore consumer confidence.

Rhys Dyer, CEO of ooba  (formerly MortgageSA) says that South Africa should follow international lead and cut rates at the next monetary policy meeting in December.

"South Africa has been successfully growing a middle class which is becoming the backbone of the economy," states Fourie. "But, high interest rates are threatening to undermine our progress because of the onerous debt servicing burden.

"Consumers are struggling and clearly need help. Rates need to be cut 1% to stave off further pain and ensure as many South Africans as possible can keep their homes, a primary source of wealth creation and many people's biggest investment."

Many countries around the world including Australia, Canada, China, Sweden and Switzerland have all cut interest rates. The UK has cut interest rates to a 53 year low of 3%, US interest rates have been slashed to 1% and Japan cut their interests rates for the first time in 7 years to stimulate their faltering economies.

"Globally the rate cycle has turned and to keep rates high in the face of an international economic meltdown is not the right tack for South Africa.

There are signs everywhere that consumers are already very distressed with consumer confidence at an all time low. Car sales have dropped, consumer credit extension has fallen sharply and house sales volumes are down by around 50%.

The most recent oobarometer showed a 6.6% year-on-year drop in house prices.

"While cutting interest rates may not solve all of South African consumer financial problems, it will go a long way to restore consumer confidence and breathe life into the faltering housing market.

"Rates should to be cut now."

Hello ooba news

ooba (formerly MortgageSA) welcomed the 0.5% interest rate cut announced yesterday by the South African Reserve Bank which will save South African home owners an estimated R259m in home loan repayments each month, but says more cuts are needed.

According to a new poll by South Africa's leading property listings website, nearly a third of home hunters decide that a property is right for them before they even enter the house - and a kitchen is overwhelmingly the most important room when it comes to the buying decision.

Propertygenie.co.za has entered into a partnership with fractionalownership.co.za to provide access to the latest fractional ownership listings which will be available from the 12 December, 2008.

South Africans spent over R10 billion during the festive season last year. This year ooba suggests carefully planning your holiday season spending to avoid a financial hangover in January 2009. "Festive season debt can take months to pay off in the new year," says Jenny Rushin, Provincial Sales Manager for ooba (formerly MortgageSA).

Weak economic conditions, higher interest rates and the global credit crisis have forced banks to be far more picky about who they will lend money and less generous with their lending rates. But Mary Jane Lefevre, Regional Sales Manager of ooba, said that before you apply for a home loan, there are steps you can take to improve your credit status and encourage lenders to look more favourably on your application.