As anticipated, the Monetary Policy Committee (MPC) kept the repo rate steady this month (March 27, 2014), which is good news for aspirant home buyers and those with existing home loans, says Dr Andrew Golding, CE of the Pam Golding Property group.
“Home buyers continue to be constrained by a variety of cost factors which remain on an upward trajectory, such as fuel/transport, electricity, municipal rates and utilities charges – in other words the costs associated with owning a home – and commuting to the workplace,” says Dr Golding.
He says although criteria for access to credit remain stringent, banks’ appetite for mortgage lending has further improved, with some relief in regard to the average deposit required, and even 100 percent bonds being granted in certain instances, particularly in the lower end of the market.
“The pent-up demand for homes, coupled with a resurgence of new buyers entering the marketplace, is rapidly being moderated to the extent that we are now seeing a market where the sustained uptake of property is resulting in widespread stock shortages, especially in major centres. A significant number of our offices report several offers being received on homes in popular, sought after areas, indicating that the market has to a large extent considerably strengthened, while house price growth seems also to be strengthening in upper single digit territory.
“While the MPC’s stance takes a considered approach based on the prevailing, key economic indicators, it is hoped that interest rates will remain steady for the immediate future, rather than commence on an upward trend. The first quarter of 2014 has reflected a marketplace which demonstrates resurgence in confidence among home buyers, investors and developers alike, resulting in rising sales volumes (unit sales) and capital value, both from a general market as well as Pam Golding Properties perspective,” says Dr Golding.