The Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) held its first meeting for the year increased the repo rate by a further 25 basis points to 7%, in line with analysts’ forecasts.
This is the seventh consecutive time the MPC has increased the repo rate, shooting the home loan rate to 11.75%. This increase was not surprising, as South Africa announced a similar rate hike in January.
If we are to remain optimistic, some analysts have predicted that interest rates will remain at current levels at least until end of 2024.
Sellers
For people who are looking to sell, affordability is going to decline across the board. This means buyers will focus on value for money, which will pressure price growth. I advise serious sellers to anticipate this and start setting their selling prices accordingly.
It will become even more important to pick agents with excellent negotiating skills that work for reputable agencies with access to the resources that will ensure your home gets maximum exposure to potential buyers and sustain the transaction through to registration.
Buyers
Existing homeowners can use the Bank Windhoek bond calculator ( https://www.bankwindhoek.com.na/Pages/Calchome.aspx ) to calculate their new installment. For example, an instalment for a N$2,000,000.00 bond at the old home loan rate of 11.50% stands at N$21,328.59 with the new rate of 11.75%, it has increased to N$21,674.14 on a 20-year bond. That is an additional N$345.55 you have to pay.
Homeowners and prospective buyers should make room in their budget now rather than be caught short if interest rates should increase further. Here are some items to look into to reduce monthly expenses.
Cancel monthly subscriptions that you are not using anymore. Do you really need an active Netflix, Showmax and DSTV subscription?
Pack a lunchbox to work with the previous dinner leftovers perhaps or generally decrease eating out. Hold off on getting the latest mobile phone or any other tech unless you can use it to generate extra income.
The next meeting of the MPC will be held on the 17th and 18th of April 2023.
*For enquiries Text, Call or email #yourhomegirl Justina Hamupembe
Cell: +264812726001, Email: justina@chili.com.na
