The decision from South African Reserve Bank to sustain its current repo rate at 6.75% has drawn a lot of mixed opinions and point of views in the property market.
Everyone knows how precious the political situation plays in all business sectors, and the current situation in the country doesn’t help at all as being unpredictable and uncertain. This also places the nation under a threat of having a credit downgrade.
Addition to this current situation, the upcoming Budget Speech this February which is a pinnacle event on the business society to be address by Finance Minister, Malusi Gigaba might adjunct some vexatious news for the consumers.
This might serve as a great reason why the Monetary Policy Committee (MPC) of the bank displayed a great wait-and-see strategy which obviously stated by sustaining their interest rate.
However, hope for a rate cut will still be in the air if some upswings in the economy continue and if the current predicament in politics will be stabilized.
Regarding this issue, a statement from different gigantic property and real estate company was expressed.
Adrian Goslett, Regional Director and CEO of RE/MAX
Adrian Goslett mentioned that the homeowners should take this opportunity as a great chance of putting themselves in more stable financial flat form for them to deal confidently with any unexpected economic challenges in the future.
“A steady low-interest rate gives consumers the opportunity to create an emergency fund that will see them through any financially challenging times they could face the future. It is also an opportunity to reduce their level of debt before another hiking cycle,” he says.
He also elaborates to the homeowners to see this interest rate stability as a great assistance for them to budget wisely and consider to pay extra to their bond accounts so they can reduce the amount of interest paid and the term of the loan as well.
“If a homeowner has a bond of R1 million at the current prime interest rate of 10.25% over 20 years, and they paid an additional R500 into the bond every month, they will reduce the term of the loan by almost three years, and they will save R221 106 in interest,” he explains.
Dr. Andrew Golding, CEO of Pam Golding said:
“With the economy expected to strengthen somewhat and interest rate hikes most likely delayed, the outlook for the local housing market is more upbeat this year. Just how much better, will become increasingly apparent in the weeks and months ahead. “While traditionally the residential property market in South Africa experiences a quieter period over the festive season, from a Pam Golding Properties perspective we began the year on a high note – with our Atlantic Seaboard office experiencing its busiest December trading period on record, partly due to renewed confidence in the market now that there is some political stability.
“Our Cape Town Southern Suburbs are also reporting robust sales activity, with considerable interest in the top end of the market from Gauteng buyers. Overall, there is substantial interest from buyers and the sentiment is that property which is priced correctly is selling, and will continue to attract buyers.
“The demand for property in the Mother City’s residential developments market shows no signs of abating, remaining a healthy market for new, off-plan developments. Buyers are cost aware, seeking fair value and good capital growth, with this sector buoyed by a big investor market as well as a strong demand from those wanting to scale down. We are experiencing numerous enquiries for such opportunities, with very good developments set to come on stream to cater for the ongoing demand. “Other positive factors currently evident include an uptick in sentiment in the Gauteng market, with heightened activity and interest from serious buyers across all price bands, including the luxury market above R10 million, and also within secure residential estates. Generally show day attendance is up and in some areas a ‘clean-out’ of properties is seeing agents now looking for stock. Our Gauteng region also reports that December 2017 sales exceeded those for December 2016 in both units and value.”
Samuel Seeff, Chairman of Seeff Property Group
“We enter the year on more positive note and with the improvements in the currency and stability of the CPI rate within the SARB target range, the time is right for a rate cut to stimulate the economy and property market.”
Seeff said that there are already increasing in confidence of consumers and to the business itself as a result of the much-awaited appointment of Cyril Ramaphosa as President of ANC and President in waiting of SA and this also serves as a positive news to the market.
He added that despite the economic challenges, the activities on the market should continue as many reasons leave the people to buy and sell.
“The first few months of the year is usually more active and we would urge those looking to sell or buy to go ahead and do so. There is no need to wait, business continues.”
He also says that the team is ready to tackle the year ahead.
“Our agents will be working with their clients to ensure that they understand the market challenges and price their properties correctly to attract the right level of interest and a good price.”