The headlines have been inundated with Coronavirus (COVID-19) cases rising across the globe. Schools, shopping centres, popular public spots, sports events across the globe have come to a stop to prevent large gatherings of people in hopes of managing the spread of the pandemic. The effects of COVID-19 on the world economy has already seen, the US cut their interest rate to almost zero, while the likes of Pakistan, Turkey and Egypt have eased theirs by between 75 and 300 basis points this week alone. It was only a matter of time, following the national address this last Sunday, that the interest rate in South Africa would be lowered to ease the negative economic impact.
“The COVID-19 has disrupted many industries and small businesses across South Africa. We are seeing heavyweight, blue-chip companies struggling as the market dives. Having the interest rate cut by 100 basis points (1%) will help ease the negative impact on the economy, as well as afford businesses and people with available resources and the ability to make smart and strategic investments,” shares Stefan Botha, Rainmaker Marketing Director.
In amongst the volatile stock markets, property remains the most stable investment opportunity. We believe that, while the interest rate has been forced into the lowest it has been in years, this opens a window of opportunity for investors and first-time buyers to capitalise on the property market, especially within off-plan developments, which has the added benefit of a reduced rate.
“Property is in many respects a long-term investment, and while things may seem chaotic now, it is important to look beyond the present and identify potential investment means. This period is an ideal time for first-time buyers to enter into the market; while investors need to capitalise on prime locations when lending rates are at their cheapest,” ends Botha.
There is no doubt that COVID-19 has serious implications on our day-to-day lives, economic standing and health. These changes have given us all a chance to re-evaluate old systems and former investments to tactfully take advantage of financial opportunities.