Category Archives: Interest rate

Information, articles and news that is relevant to the South African interest rate.

Things can only get better. Hold on. Go check out the National Credit Act

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DontPanic1So the interest rate is down by 100 basis points and Tito Mboweni says we mustn’t expect any further major rate cuts. Our president, Jacob Zuma admitted that we are in for tuff times with the global recession. Now I understand that everything is looking dark and bleak but this is the time when we should stand up, take our lives by the rains and start moving in the right direction.

If you have unmanageable debt and it looks like you are going to lose your house, go speak to someone. If you need to find out what you can do and how to get help go to the NCA site http://www.ncr.org.za there is a lot of information available there. I know it is never easy to ask for help but rather do it sooner than later. Your other options are to go to your bank, write a letter to them as well, but go to them and talk to a HUMAN BEING, and see what they can do for you.

I always say you should try whatever you can and brace yourself for what could happen. As soon as the markets turn, and they will, if you managed to keep your real estate, you will be smiling again.

What to think about when getting a jacuzzi.

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When you think about making improvements to your home you don’t always need to think about the boring things to do, if you have the money to splash out a bit why not get something fun like a jacuzzi or spa bath. Imagine yourself relaxing in the frothy water with a nice cool drink in your hand watching the sunset over the horizon.

Before jumping into something though it would be best to consider your options carefully, ask yourself these questions first.

1.  Where will it be located in your home?   Certain homeowners have an indoor area in mind that would be suitable for a jacuzzi or spa bath, others would prefer to install it outside under their lapa.
2. What size jacuzzi would suit you needs?   How many people will be using the jacuzzi on a regular basis. They come in an array of shapes and sizes and you should be able to find one to suit your needs perfectly.
3. What is your budget? A large jacuzzi can be expensive!   Try not to go overboard, you will enjoy the relaxing bubbles far more if you know you will not still be paying it off for the next 15 years.
4. What level of comfort do you desire in your new jacuzzi?   Again, they come in a wide variety of shapes and sizes with many different features to choose from.
5. What safety features are important?   Do you have children that will be using the jacuzzi, will they have access to the jacuzzi at any time when they may be unattended? There are safety measures that can be installed to minimise the chance of injury.
6. What considerations need to be made on installation?   Will you be wanting to enjoy the jacuzzi in the nude at any time, if so ensure that it is installed in a private area away from neighbours’ prying eyes.

If your jacuzzi is well maintained over the years it can add value to your home, buyers will see it as a built-in luxury they would love to have. Many people also install them to help them with things like backpain, the warm water and directional jets can really help with muscle pain.

Don’t let yourself get suckered into anything, always use a professional as a mistake can be very costly. Make sure you are confident in your decision to get a jacuzzi as there will be some maintenance and cleaning, but for the most part, if it is installed correctly, the only thing you will have to worry about is never wanting to get out.

Manuel denies recession.

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Trevor Manuel has gone on the record saying that South Africa is not in a recession. He is referring to certain economists saying we are already in a recession, who are pointing to evidence indicating that we are in a recession, despite it not technically being accurate.

Manuel has said that although certain economic factors are there we are not technically in a recession.All the experts are getting rather confusing with everyone eager to voice their own opinion on the matter. ANC President Jacob Zuma has also warned against retrenchments as a kneejerk reaction by businesses.Usually businesses cut jobs when there is trouble on the horizon.

If more people are unemployed there will be even less spending power in the market and will make an economic recovery even more difficult. Zuma also said that business and government should come to an understanding that would encourage and utilise innovative methods to prevent joblosses.

Many people were hoping for an emergency rate cut by early next week but that seems less and less likely as the week progresses. There we had experts on both sides of the fence too, some saying it would be a great idea and would improve our situation immediately and then others who say it would be a terrible idea that would bring negative consequences further down the line.

What do you think? Is South Africa already in a recession?

Emergency rate cut rumours abound.

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Many people are speculating as to whether or not we may be in for an emergency interest rate cut.

This is because of South Africa’s poor economical performance in the last quarter of 2008, showing a 1.8% contraction in output. Many people are concerned that we are entering a recession and could soon follow in the steps of the United States where they are experiencing very serious financial problems despite plans of huge bailout packages.

Perhaps an emergency rate cut will work and stimulate some more consumer spending, however many people are already under so much pressure that a rates cut would merely decrease their monthly budget deficit and not give them any real money to spend.

It may just be too little too late and more drastic action may need to be taken as we watch basic commodities such as bread and milk skyrocket in price when they should have been becoming more affordable.

According to a Citigroup economist the Monetary Policy Committee is only likely to call an emergency meeting if the GDP drops by between 2% and 2.5% . So although there are many rumours it is unlikely that anything will happen before early next week.

What do you think? Will there be an emergency rate cut and will it help.

No sign of food prices decreasing.

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As reported by the trade union Solidarity there has still been no decrease in food prices by the supermarket chains despite their assurances that there would be.

The price of food is greatly affected by the price of fuel, we saw great increases in the cost of basic commodities like milk as the price of fuel steadily increased over 2008. The price of fuel took a nosedive however and even after a major fuel price cuts there was no drop in food prices.

This is very worrying for many South Africans who are already struggling to afford their basic monthly groceries. And it is not the end of the saga. There are more petrol price increases expected in the coming months that will certainly affect the price of food again.

Hopefully the continued exposure and investigation of empty promises made by these chain stores will show some results in the future. Unfortunately it doesn’t seem to have worked yet and we may see many more ordinary people finally squashed financially under the increasing burden of trying to feed themselves and their families.

State of the nation address.

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South African President Kgalema Motlanthe is expected to deliver his state of the nation address just after 11am today. It will be broadcast on television and is expected to be watched by millions of South Africans.

Among the subjects Motlanthe is expected to tackle is the disbanding of the Scorpions, a move which sparked fierce debate and controversy at a time when many top officials were suspected of questionable behaviour, sometimes even criminal.

He is also expected to address the ever present question of South Africa’s poverty stricken masses and the health care system in the country that many people feel is woefully inadequate.

Some were speculating that the President may announce the date of the national elections today aswell but a party official has dismissed the idea and said that the President would be making that announcement next week. It will be one of the fiercest political battles since 1994 however the ANC is nevertheless expected to win.

Pres. Motlanthe accepted the position of president of South Africa after former president, Thabo Mbeki, was asked to step down amidst a legal scandal involving ANC party president Jacob Zuma.

Pres. Motlanthe’s state of the nation address will be a strange event in South African history,because it is being delivered by an acting President who’s term of office is likely to end after the elections even if the ANC wins. The ANC’s presidential candidate is Jacob Zuma who is currently embroiled in a seemingly never ending legal battle over fraud and corruption charges that are linked to an arms deal that created alot of scandal.

Hopefully President Motlanthe will deliver an honest speech that addresses the real issues faced by everday South Africans.

An update on the average time a property remains on the market.

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According to FNB’s latest Residential Property Barometer, released on Monday, there may be bad news for home owners hoping for quick sale.

According to the figures released, currently the average time it is taking for a property to sell is 15 weeks and 3 days or almost 5 months. However this is still vastly better when compared to 20 weeks and 1 day which is what it peaked at. Although the time frame has improved it probably also points to most sellers not getting their asking price.

We will have to wait and see what the Tito Mboweni does with the interest rate in the coming months to get a better idea of what homeowners can expect this year and the year to come. The interest rate will influence many homeowners in many ways whether it goes up or down.

Pay more now and save alot in the end.

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Many people who want to save alot of money over the long term will opt to keep paying their higher bond repayments instead of taking advantage of the recent interest rate cuts and those that are likely to follow as the year progresses.

By paying more than your monthly minimum you could save yourself hundreds of thousands of rands in interest over the term of your bond.Besides that you could also shorten the length of your bond. This is good news to most of us, as none of us want to be tied down financially for all eternity.

Some homeowners are however not in a position to continue paying such a high bond and really need the financial relief the rate cuts can bring. But for those homeowners who have become used to paying the higher payment or if you suspect you could pay a bit extra it would be a great idea to check with your lender and ask them to assess how much you would save in the long run by paying a little bit extra each month.

Always check with a qualified professional before making any decisions that could drastically affect  your life.

Cash is King!!!

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Yes cash is King. According to statistics the number of residential real estate transactions that were done without bond finance has increased to 50% in the last year. This is probably due to the rising interest rate.

Another reason for this is the fact that Banks lending criteria has also become stricter causing a lot less “credit” buyers in the market. Right now if you have the cash, you will be king. Anyone that can afford to invest in the real estate, or stock market for that matter now, and be patient, will make lots of money. I have heard some advisors saying that the days of awesome growth in the property market is over but I have to disagree. If you compare our real estate prices to the rest of the world we still have a bit to catch up and even if we don’t see extravagant growth again, we will still get descent numbers as soon as this market turns.

So is it a good idea to put all your cash in real estate? I have to be honest this is probably a question best answered by your financial advisor. The risk I see right now is that if you need access to your cash, for what ever reason, you probably shouldn’t tie it up in real estate because it is going to take a bit of time before you’ll see returns on the investment and if you try to take it out to early you will lose money.

So as always you should do proper planning before deciding what to do with your money, and you probably should do this with the help of a financial advisor.