Today the Reserve Bank’s monetary policy committee announced that the interest rate will remain unchanged at 6.75 percent.
Industry leaders commented on the impact they expect this will have on the property industry.
The announcement today by the Reserve Bank governor to keep the repo rate unchanged shows that there is some stability in the economy which, as per the last MPC decision, will have a direct impact on the property sector and in particularly the commercial property market.
John Jack, CEO of Galetti Corporate Real Estate
The Reserve Bank should have been brave and should have cut the interest rate to kickstart the economy. Following the conclusion of what is largely seen as a successful election, not much has changed. There has been no real positive impact on the economy or property market, and we appear to be at an economic impasse. Good news and a positive injection are needed to get the economy and property market back on track.
Samuel Seeff , Chairman of the Seeff Property Group
A reduction in the repo rate, on the back of the market-friendly election outcome, would have created stimulus for the economy and property market, as well as a confidence boost for consumers in general, especially home owners and buyers with outstanding mortgages and hefty bond repayments.
Having said that, and based on the Pam Golding Residential Property Index April statistics, it is encouraging to see that the national housing market already appears to be starting to see promising signs which augur well for an uptick in activity now that the dust has settled on the election.
Dr Andrew Golding, chief executive of the Pam Golding Property group
The decision by the South African Reserve Bank’s Monetary Policy Committee today to leave interest rates unchanged has come as a “very welcome surprise” to many South Africans and will allow households to avoid straining their budgets even further than they are currently.
Now that the elections have come and gone with no major surprises, the government could be looking to let South Africans breathe before starting the more serious work of strengthening the economy through monetary policies.
Mike Greeff, CEO of Greeff Christies International Real Estate
In terms of what this decision means for the housing market, it is likely to allow the opportunity for market activity to pick up post-elections. We therefore remain optimistic for long-term house price growth. On the other hand, the slowed rate of rental inflation we have been experiencing over the last year has had the positive effect of subduing the overall inflation rate. Should rental prices inflate along with property prices, interest rate hikes will also become more probable in the future
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa
