Today’s decision by the Monetary Policy Committee to keep the repo rate steady is good news for the residential property market, says Dr Andrew Golding, CE of the Pam Golding Property group.
“Maintaining stability in the interest rate sends a positive message and reinforces much needed confidence among home buyers and investors, and hopefully will further improve sentiment and add impetus to the recovery in the property market,” he says. “Coupled with this is the fact that mortgage lenders are demonstrating an increased appetite for lending which is ultimately the most important driver of activity in our property market.
“One does however need to be circumspect regarding this optimism in the light of CPI (Consumer Price Index) inflation edging upwards and as a consequence the fact that consumers continue to be beset by rising food and fuel costs, as well as electricity, water and municipal rates and tariffs, all of which erode disposable income. Another source of concern is the extent to which the country’s GDP growth is lagging targets required for sustainable growth, which is necessary for the property market to prosper and thrive.
“On another, positive note, the peaceful election with very little disruption served to reassure markets – the property market included.”
Dr Golding says the Pam Golding Property group is noting brisk market activity across all price bands. The top end from R10 million and upwards of R20 million is moving strongly, while the price bands both above and below R5 million are experiencing strong and increasing activity.
He says developers are also more and more active, bringing stock to market in prime locations in high demand areas – mainly in metropolitan areas, and geared to cater for specific pricing requirements. The rental market is buoyant, adding further appeal for buy to let investors.
“As is generally the case the market adjusts and adapts to new challenges and demands and the ongoing resilience of South Africa’s property market continues to attract aspirant home buyers and investors who appreciate the sound investment benefits of home ownership over the medium to long term,” adds Dr Golding.