The decision by the Monetary Policy Committee (MPC) to keep the repurchase rate unchanged at 5.5 percent per annum last week has been welcome.
One of Simbithi’s finest properties is on the market for R14.75 million. The home is 800 square metres set on 1 953 square metre land and labelled a great buy for the discerning investor.
Click here to read what property experts had to say about the rates decision.
Announcing the MPC decision last week, the South African Reserve Bank Governor Gill Marcus said since the previous MPC meeting, the outlook for domestic inflation and economic growth has deteriorated, posing a serious challenge for monetary policy going forward.
Inflation is now expected to remain above the upper end of the target range for a more extended period, but there is no evidence of significant demand pressures in the economy.
“While economic growth in the fourth quarter was likely to have exceeded that in the previous two quarters, the forecast for growth in 2012 has been revised downward.”
Marcus said inflation is now expected to remain outside the upper end of the target range for the whole of 2012 and to peak in the second quarter of 2012 at around 6.6 percent before declining gradually and returning to within the target range in the first quarter of 2013.
The bank says inflation is expected to measure 5.5 percent in the final quarter of 2013.
The outlook for domestic economic growth remains subdued with the bank forecasting that the annual real growth rate in 2011 is estimated to have been in the region of 3.1 percent and the outlook for 2012 and 2013 has deteriorated relative to the previous forecast, mainly due to a downward revision to the global growth assumption.
Growth in 2012 is expected to average 2.8 percent compared with 3.2 percent in the previous forecast, while the forecast for growth in 2013 has been revised down from 4.2 percent to 3.8 percent.
She says the MPC maintains a preference for a stable interest rate environment given the conflicting pressures on monetary policy at this stage and remains ready to act appropriately to ensure the attainment of the inflation target over the medium term, while being supportive of the domestic economy.
Herschel Jawitz, chief executive officer of Jawitz Properties said while an interest rate cut would have been welcomed, what should be avoided is the rate coming down and then going back up again over a short period of time.
Jawitz says would-be buyers should enter the property market now as property prices in real terms are more or less at 2007 levels.
“A key driver for the residential market is consumer confidence and consistent interest rates probably outweigh the benefits of a short term cut.”
Jawitz said would-be buyers should enter the property market now as property prices in real terms are more or less at 2007 levels.
“This low-interest rate environment will continue to give homeowners who are in arrears further opportunity to catch up.”
Meanwhile, Seeff Properties chairman, Samuel Seeff explained that we are nearing the end of a five year cycle since the introduction of the National Credit Act and expects overall transaction levels and prices to remain relatively stable for the year.
“We anticipate a significant clearing of bank and urgent sale stock out of the market.”
Following this and provided that the economy and interest rates remain stable, we will see some strength returning, he says.
Seeff said demand and commitment from buyers will see increased competition and sellers becoming less likely to negotiate.
Prices will slowly pick up, paving the way to a balance between supply and demand, and recovery of the market.
Seeff reckoned the sustained demand for realistically priced properties will continue and said there is always an underlying demand from those looking to upsize, downsize or move with their jobs.
He said Seeff estate agents operating in the prime coastal markets have reported an increase in buyer sentiment this year suggesting that buyers who held back towards the end of 2011 are now ready to make their move.
Although consumers are facing increasing pressure on their household budgets, mortgages are still more affordable than ever, but buyers need to hurry as bargains will not last long, he said.
Principal of Seeff Dolphin Coast, Andreas Wassenaar, said a new wave of architectural design at Simbithi Eco-Estate in Ballito/Salt Rock in KwaZulu-Natal is raising the bar for homes on the estate and creating value for all of the surrounding properties.
He analysed 206 registered transfers in the estate in 2011 representing R345.9 million in property transactions.
Of the 206 transfers, 54 (26.2 percent) were sales in sectional title schemes to the value of R130.1 million and 152 (73.8 percent) were freehold properties.
“The freehold sales were still dominated by vacant land sales priced largely between R510 000 and R1.4 million.”
He said vacant land transactions can be expected to slow down this year, since the bulk of the land from the master developer is sold and many vacant land property owners will be commencing construction on their sites.
The Wild Coast in the Eastern Cape is described as one of the most remote and untouched shorelines that South Africa has to offer. According to RE/MAX Alpha, the location attracts investors looking for holiday homes in a rustic and laid-back setting.
A detailed estate report indicates that the mean value of Simbithi transactions over the past 12 months was R2 997 903 and the R8 million threshold is being breached by recent home sales, he said.
Simbithi's popularity has skyrocketed over the past three years and it has become the first-choice estate for young families as the children's facilities and sporting amenities provided within the estate are unmatched along the Dolphin Coast.
“Simbithi represents one of South Africa's hotspots in terms of new developments and building activity.”
The Wild Coast in the Eastern Cape is described as one of the most remote and untouched shorelines that South Africa has to offer.
According to RE/MAX Alpha, the location attracts investors looking for holiday homes in a rustic and laid-back setting.
Anne Chegwidden, broker/owner of RE/MAX Alpha in East London, which also services the Wild Coast region, said property market activity increased in this region over the festive season.
Morgan Bay had the most activity this past festive season because it is ideally located and boasts one of the prettiest beaches and lagoons, which allows for protected swimming.
Chegwidden said many houses in Morgan Bay are priced between R1 million and R1.5 million, plots range from R300 000 to R 450 000.
Haga Haga was another hot investment node in 2011 with plots at the Haga Haga retreat being sold by the developer with a discounted price of R50 000.
The plots are situated very close to the main beach. Houses in this location are priced between R1 million and R1.2 million, said Chegwidden.
Pam Golding Properties (PGP) reported that leading architect Arthur Quinton sold one home and bought another in the same prestigious Cape Town suburb of Fresnaye in December 2011.
Quinton, a partner in acclaimed Cape Town firm Arthur Quinton Darryl Croome Architects, is known for his understated, elegant style of design.
He and his partner jointly have over 50 years’ experience in residential, commercial, industrial and hotel design and have created some of Cape Town’s most spectacular homes.
His former property in Avenue Disandt, Fresnaye is one of his signature stylish yet minimalistic homes.
PGP’s area manager Basil Moraitis said the property was sold to an upcountry buyer relocating to the Cape.
He said three houses were sold in Fresnaye in December for R9.4 million, R10.75 million and R13.5 million, two of them to upcountry buyers
Quinton bought an iconic site in Ave St Bartholomew, a quiet cul de sac in the same suburb, known for its exclusive homes and spectacular views.
The existing house on this property is to be demolished, creating a blank canvas for the architect to design a new spectacular home.
A view of acclaimed architect Arthur Quinton’s former home in Fresnaye sold by Pam Golding properties in December 2011.
Moraitis explained that 2011 was a very busy festive season with a surge in activity right up to the Christmas weekend and beyond.
Buyers were looking for apartments, houses and residential units in newly completed developments priced from R750 000 starter pads to luxury homes priced up to R20 million.
He said they sold 30 properties in December, two thirds of which were sectional title properties to local and upcountry buyers who were in visiting Cape Town for the holidays.
In mortgage dependent areas, sales are limited only by the sustained stringency of lending criteria of the financial institutions and buyers remain extremely value conscious, according to PGP.
If you missed the buying boat last year and have the cash to splash, a R45 million apartment at V&A Waterfront’s Bantry Bay is a must buy for lovers of luxury homes.
Seeff Properties said the executive apartment offers close to 600 square metres of floor space.
Property prices of sea-view sectional title units range between R25 000 and R75 000 per square metre and the three most recent apartment sales in the area achieved rates per square metre of R49 595, R53 004 and R63 529 respectively, according to Seeff.
The agency said Bantry Bay is one of the country’s top suburbs, sought-after by a variety of buyers such as celebrities, captains of industry and entrepreneurs, ranging from locals especially in Johannesburg and foreign buyers. –Denise Mhlanga