While it appears South Africa’s repo rate still remains in a rising cycle, today’s decision by the Monetary Policy Committee to pause and keep the rate stable makes sound economic sense given the stagnant economy and ongoing cost pressures exerted on consumers, says Dr Andrew Golding, CE of the Pam Golding Property group.
“Household debt combined with rising interest rates has impacted consumer affordability, with South Africa’s largest bond originator, ooba, reporting a slowing in activity among first-time home buyers”
“The pause in the repo rate will provide aspirant and existing home owners with a further assurance of the sound medium to long term investment potential in property.”
Dr Golding says despite the prevailing economic challenges and socio-political issues currently hitting the news headlines, sustained confidence in the property market remains a bright spot on the radar.
“Successfully concluded transactions are also facilitated by the normal churn of activity as people relocate for a host of reasons including for business purposes, lifestyle change, access to educational facilities and pure investment.”
Just this week the Pam Golding Residential Property Index reported on the fact that the country’s resilient residential property market seems to be rebounding with a modest increase in house price inflation.
“In line with this, and coupled with innovative marketing drives, Pam Golding Property group sales for April 2016 are six percent up on April 2015, while our year to date (March to April 2016) sales turnover has increased by nine percent on the previous year”.
“During April areas of notable high activity for the group include Pretoria, Cape Town’s Southern Suburbs and Hermanus. This is against the backdrop of consistently strong performance in the Western Cape’s Cape Town Metropolitan Region, the Boland and Overberg, Gauteng, KwaZulu-Natal North Coast and Garden Route, with growing activity in areas of the Eastern Cape”.
“Home buyers demonstrate an increasing desire to own their own homes while other trends reflect a continued high demand for rental accommodation, secure estate living, convenient urban apartments in commercial hubs and family homes with access to good schooling”.
“Investors seek not only well-positioned income-generating properties ie buy to let accommodation, as well as second and third properties situated both nationally and abroad, thereby expanding their property portfolios and spreading their wealth across continents.”