Remain resilient as interest rates hold steady says Tyson

The Reserve Bank’s decision to pause interest rate cuts today did not come as a surprise for

Chris Tyson, CEO of Tyson Properties.

This week, it emerged that the Consumer Price Index (CPI) decreased by 0,1% between

July and August, with four of thirteen categories in the inflation basket (including food and

non-alcoholic beverages which contribute to household spend) and household equipment

and routine maintenance dipping. Economists remain hopeful that inflation will remain in the

acceptable 3% to 6% band going forward.

However, this does not necessarily mean that households are finding it any easier to

manage monthly expenses, he points out.

Sometimes statistics mask the daily grind and, despite indications of a slight uptick in retail

activity, overall consumer demand remains low. Economic policy uncertainty, a vacillating

rand and the beginning of the Madlanga Commission of Inquiry into alleged police corruption

could feed ongoing uncertainty.

However, Tyson is a firm believer that South Africans are extremely resilient and, even if this

pause is just the beginning of what many economists expect to be a prolonged halt in

interest rate cuts, he says that property owners have every reason to be positive if they

compare this September to September 2024.

The current cutting cycle has seen the South African Reserve Bank (SARB) MPC cut

interest rates by a cumulative 125 basis points (1.25%) since September 2024.

Although acknowledging the relief that rate cuts offer to stressed households, Tyson

continues to urge property owners to budget wisely and repay mortgages at an existing

slightly higher level whenever possible in order to reduce the overall repayment period.

His advice to sellers to price properties wisely still stands. He also encourages investors to

take advantage of the current buyers’ market to invest in income generating properties as

the already thriving rental market is likely to continue its upward climb whilst economic

uncertainty and low growth persist.

Overall, he recommends that homeowners continue to cultivate sound financial habits when

managing their household budgets.

His tips to help South African homeowners remain economically resilient are:

1. Try to keep your repayments on loans at current levels if you can. That will enable

you to pay off your home loan faster and become less vulnerable to future rates

hikes.

2. Create or stick to a strict household budget that will enable you to control disposable

income.

3. Review your insurance. Remove listed items such as laptops and phones that you

are no longer using and ensure that car insurance is adjusted according to the age

and resale value of your vehicle.

4. Maintain your home. Keep your property in good condition so you do not land up with

bigger issues you need to pay to have repaired.

5. Create a passive income stream by leasing a cottage or create an AirBnB by

converting an unused space on your property.