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Two ways downgrade can hit housing market - economist

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Cape Town - The potential impact of ratings downgrades on the South African housing market can be negative in two ways, John Loos, household and property sector strategist at FNB, told Fin24 on Tuesday.

Firstly, they have the potential to weaken the rand, which implies potentially higher imported price inflation, which in turn raises the risk of further interest rate hiking. This would dampen growth in housing demand.

Loos pointed out that the rand has indeed already weakened since the S&P downgrade announcement.

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