select
|

Reduction in repo rate would have helped boost economy

While the decision by the Monetary Policy Committee meeting to hold the repo rate steady was expected, a reduction would have provided a much-needed boost for consumer confidence and market sentiment given the ongoing weak economic growth experienced in South Africa, says Dr Andrew Golding, CE of the Pam Golding Property group. He says it would also provide added incentive for savvy first time buyers wanting to gain a foothold on the property ladder.

“While we await the ratings announcement from Moody’s, the third major global ratings agency, and against the backdrop of volatile socio-political factors and slower national house price inflation, the residential property market overall, remains strongly resilient.

“For home buyers and those who follow trends in the residential property market the most common focal point is is whether sales and values go up or down. Over the past few years the market has remained remarkably robust, given the poor performance of the economy and nationwide unrest over lack of service delivery and lack of jobs. Throughout 2016 inflation was above the government’s upper target figure of 6%. While this exceeded the national house price inflation rate, certain sectors and regions continued to outperform inflation. The Western Cape regional market in general and Cape Town in particular, strongly outperformed inflation last year.”

Says Sandra Gordon, Pam Golding Properties senior research analyst: “Encouragingly renewed Rand strength, combined with declining of food price pressures, has seen the inflation rate easing back into the Reserve Bank’s inflation target at 5.3% in April 2017. The longer the Rand’s current strength persists, the better the outlook for local inflation and, ultimately, the prospects for an interest rate cut later this year.”

Standard Bank’s recent data shows Western Cape property leading the field with values 39% above their trough in 2008-09, with Gauteng not too far behind with price growth of 35.5% over the same period. FNB’s latest property barometer shows house prices in April improving to 5.5% nationally.

Adds Gordon: “According to our latest Pam Golding Residential Property Index we are also seeing that house price growth in the Eastern Cape continues to rebound. Cape Town remains the top performing metro, followed by Nelson Mandela Bay, while house price inflation in both Johannesburg and Pretoria appears to be rebounding. A further positive is that semi-gration to the coast seems to be underpinning coastal housing markets relative to non-coastal.

“These are some of the dynamics which buyers need to take into account when making a sound investment decision. Apart from the ongoing migration of people and movement between regions, other factors include the supply of new housing units and lifestyle trends.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK