26 Nov 2012
The decision by the Reserve Bank to leave the repo rate unchanged was not a surprise for property experts who say this is still a good time to buy.
The Reserve Bank Monetary Policy Committee (MPC) left the repurchase rate unchanged at 5.0 percent per annum.
In making the decision, the MPC noted that it assesses the balance risks to the inflation outlook to be on the upside, given the continued pressure on food prices, uncertainty of the exchange rate movements and the reweighting and rebasing of the CPI.
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Adrian Goslett, chief executive of RE/MAX of Southern Africa says although no further rate cuts are expected, the current rate is still highly favourable for homeowners and would-be buyers, bearing in mind that the last time South African consumers experienced rates at this level was in 1974.
“While some micro property markets are slowly beginning to transition, for the most part we are still in a buyer’s market.”
Buyers with a good credit record and access to finance should take advantage of the current conditions before the market changes, he says.
Meanwhile, Samuel Seeff, chairman of Seeff Properties says while a cut in the repo rate would have been good news for homeowners, the decision is still welcome for the property market.
“A rate cut certainly would have improved affordability for bond holders, but it may also have sent a signal that it is time to start spending.”
Seeff urges consumers to focus on reducing their household debt and those wanting to buy should enter the market now without delay.
Dr Andrew Golding, chief executive officer of the Pam Golding Property Group notes that the housing market in South Africa continues to be resilient characterised by increased activity levels in all sectors of the market.
“As we approach the year-end holiday season, this is generally a time when the residential property market experiences increased activity for a variety of reasons.”
He explains that these include, among others, those relocating on business or in pursuit of a different, more desirable lifestyle, those looking to acquire a property to retire to now or in the future, while others are looking for a destination in close proximity to learning institutions for the benefit of their children.
Some buyers seek a leisure or getaway home where they can enjoy quality family time on weekends and holidays, while others are endeavouring to purchase a sound property investment for future security.
There is a natural cycle of people who are either upgrading or downsizing as their needs and circumstances in life change, he adds. – Denise Mhlanga
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