How to stay afloat in the property market during an interest rate hike

Seeff shares what homeowners and buyers can do amid interest rate hikes to achieve their property goals

At Seeff, we’re wholeheartedly championing the cause for reduced interest rates, well aware that the current elevated rates are putting a damper on both the economy and the property market. Nonetheless, it seems homeowners and buyers might be subjected to these challenging conditions for a bit longer than we'd hoped.

Despite the factors beyond our control, there are proactive steps we can take. By making informed adjustments, you – the consumer, homeowner, or prospective buyer – can steer through these challenging market conditions with greater confidence. It’s a time for a fresh perspective, suggests Seeff. 

How to Thrive Despite Interest Rate Hikes

In the current climate of rising interest rates, if you're looking to buy, consider securing a home that's comfortably within your budget rather than stretching to your financial limits. This strategy ensures you have a financial buffer to manage higher repayments more comfortably.

Samuel Seeff, the chairman of Seeff Property Group, assures prospective buyers of a silver lining: banks are still lending, with favourable terms available for those who qualify. However, it is still essential to recognise the broader financial picture and make smart adjustments:

• Review your budget critically, trimming excess like unnecessary subscriptions and seeking out less expensive insurance rates.
  
  
• Prioritise reducing your debts, particularly those with high interest. Paying a little more than the minimum each month can significantly decrease the overall interest accrued and hasten debt freedom.

For homeowners with a mortgage, Seeff’s mortgage originator, ooba, suggests two key avenues:

• Access any surplus funds from your access bond to alleviate debt.
  
  
• Explore refinancing your home loan, potentially unlocking better terms based on the current value of your property.

If repayments are becoming a struggle, take action swiftly. Debt counsellors advise against delay. Reach out to your creditors to negotiate new payment plans, aiming to prevent the accrual of bad debt and protect your credit score. If keeping up with loan repayments is a challenge, contact your bank immediately to discuss alternative arrangements.

If you happen to be selling your home instead, and due to financial constraints, adopt a different approach. Be clear with your Property Practitioner about your circumstances; their expertise can guide you towards the most beneficial outcome. And if life’s changes suggest a smaller space could suit you better, downsizing could be a financially and personally rewarding move, potentially offering a simpler lifestyle and additional liquidity.

In the shifting sands of the property market, especially during an interest rate hike, the right guidance can make all the difference. Seeff, with over 50 years of experience and a strong presence across Southern Africa, stands as a beacon of excellence in the real estate world.

If you're grappling with the impact of rising interest rates on your property goals, let Seeff be your guide. Our understanding of the market's intricacies, backed by a long-standing history of excellence, ensures that you can prosper through property. Contact us today.