Interest rates ‘could come down further’ – Irvine Real Estate – Irvine Homes for Sale

by Robert Mack on January 10, 2011

in Buyers, Latest News, Sellers

The Reserve Bank’s repo rate has come down from 12% in 2008 to 5.5% after the last cut in November last year. This was after inflation was lower than expected for the most part of last year.

The prime lending rate is now at a 37-year low of 9%.

But, according to Ilke Smit from Metropolitan, further rates cuts will only happen this year if inflation comes in below expectations again.

Inflation according to the consumer price index (CPI) rose to 3.6% year on year in November following a five-year low of 3.2% in September. The Reserve Bank expects inflation to stay in the target band of 3% to 6% until at least the end of next year.

Smit said the international oil price was likely to exceed $100 per barrel soon, but the strength of the rand could help to counter the impact of this increase and prevent high fuel price hikes, which have a major indirect impact on inflation.

Investec economist Annabel Bishop said international food prices and hefty electricity tariff hikes could put upward pressure on consumer prices this year.

However, she does not expect interest rates to rise before the end of the year.

The Reserve Bank’s monetary policy committee will announce its next interest rate decision on January 20.

Waiting for the market to bottom out may result in you missing out on the historically low interest rates that are avaiable to you today! Don’t miss this train….

Posted on Irvine Orange County Real Estate Market News

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