“The decision by the Reserve Bank to keep interest rates unchanged is the right decision despite the latest inflation figures”, says Herschel Jawitz CEO of Jawitz Properties.
The announcement seems to be less about inflation and more about low levels of consumer and business confidence in an economy that is shedding jobs and not growing.
The current residential market is currently subdued, both in terms of activity levels and price growth other than in the Western Cape. In some part this is due to financial stress facing consumers but the real impact has been the political and social stresses that have led to the low levels of consumer confidence.
“When people feel uncertain about the medium and long term, those decisions such as buying a home are delayed. While the decision to keep rates on hold will not help with affordability, it will take away some of the buyer uncertainty and caution in the residential market and that is always good for business,” he says.