Rate hike likely to up rental prices | Fin24
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Rate hike likely to up rental prices

Jan 30 2014 15:09

The Sarb raised interest rates, keeping in step with attempts by Turkey and other emerging market economies to shore up their currencies. (Shutterstock)

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Johannesburg - The repo rate hike would probably increase the price of residential rentals and could affect the consumer price index (CPI), FNB's home loans department said on Thursday.

In addition, more people were likely to sell their homes in order to downscale due to financial pressure. In both scenarios, people would be more likely to rent accommodation.

According to the FNB estate agent survey, those buying properties in order to let, accounted for around 8% of total home buying, down from a quarter of the total buying market in the 2004 survey.

"The combination is likely to see higher rental inflation, just as we saw the last time interest rates peaked around 2008."

She said that the global financial crisis had moved into a new phase which was posing challenges to emerging market economies, including South Africa.

sarb  |  gill marcus  |  interest rates  |  cpi


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