Despite economic pressures, South Africans reaffirm confidence in residential real estate

As anticipated and on the back of a reduced inflation rate, the Monetary Policy Committee announced its decision yesterday to hold the repo rate steady, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“This is positive news for homeowners with mortgages and aspirational home buyers, particularly as the impact of increased fuel costs and in particular the significant hike in the fuel levy, are weighing in, not to mention the potential ripple effect across the economy of a proposed whopping 25 percent increase in electricity tariffs.
“Power shortages, coupled with steep annual increases in energy costs are placing rising pressure on consumer spend and business confidence in general. If this request is granted, it will boost inflation. At the same time, higher individual tax rates and ever-increasing municipal tariffs and property rates are set to place housing disposable income under further pressure.
“However, the reduction of transfer duties payable on property transactions below R750 000 (vs the previous threshold of R600 000) will provide some relief and incentive for the majority of aspirant home buyers in South Africa - as Lightstone data suggests that about two-thirds of both freehold and sectional title sales during the past 12 months were priced below R800 000.
“We at Pam Golding Properties  remain positive regarding the outlook for the South African residential property market and for house prices, with an increase in high single digits still anticipated, allowing for a real increase in the value of homes for existing home owners.
“Pam Golding Properties' sales reaffirm the ongoing trend towards property acquisition as a sound investment choice, with exceptional total sales of R1.8 billion concluded in February 2015, which is 14 percent ahead of February 2014.”

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