How increasing inflation affects the value of property
Limited supply and high demand drives house price growth
Over the past three months, the SA Reserve Bank (SARB) has been monitoring the increasing inflationary environment. This resulted in the bank taking a decision to increase interest rates to 7.5%, as one of the levers to manage the growth in inflation. As consumers of goods and services in SA, we are experiencing the prices of basic consumer goods going up every day. This impact, in plain terms, is inflation in action and it is having a negative impact on our lives.
So, what does inflation really mean, and how will it affect an already active housing market, with high demand and low supply? To help understand how your property can be affected by inflation, it is important to first define inflation and then consider its impact on existing homeowners and new home buyers...