Property sector warns rising interest rates could slow housing delivery and job creation

03/12/04 Disgruntled construction workers, at corner of Harry Gaulum and Norfolk South Africa needs a growth compact that brings monetary policy, fiscal policy, infrastructure investment, housing delivery, municipal reform and private-sector participation into one coherent national recovery agenda.

While higher interest rates may tame inflation, they cannot build houses.

South Africa recently experienced another painful reality: interest rates have increased by 25 basis points at a time when the economy is already fragile, households are already stretched and consumers are already fighting to survive, says a property investment company RB Property Group.

Delivering the Statement of the Monetary Policy Committee (MPC) on Thursday, May 28, Lesetja Kganyago, Governor of the South African Reserve Bank (SARB) said the committee decided to increase the policy rate by 25 basis points, to 7%, effective from Friday, May 29.

Meanwhile, Rob Buthelezi, chairman at RB Property Group, believes that the country cannot interest-rate its way out of a structural economic crisis, says Rob Buthelezi, chairman at RB Property Group.