"While anticipated, the decision by the Monetary Policy Committee meeting to leave the repo rate unchanged (January 26, 2010) will disappoint many, as although we are seeing some positive indicators it is evident that South Africa's economy is by no means out of the doldrums, particularly with the looming outcome of the Eskom tariff decision and concomitant effect on inflation. So a further boost for the economy would have been most welcome.
We are still hopeful that the interest rate may decrease further during the course of this year (2010).  However, what the market also needs is for the mortgage lending confidence of the banks to increase. We did see a small improvement in mortgage lending during the last six months of last year (2009) but on the whole mortgage lending criteria are still strict and banks are lending selectively.
Despite this we anticipate that the reductions in interest rates which were implemented during the course of last year will manifest themselves during this first quarter - which is traditionally an active period for buying and selling of property with those relocating for business and other purposes. The latter includes an increasing trend towards those relocating for educational purposes, seeking good access to schools. Having said that, while we remain cautiously optimistic, the housing market is by no means buoyant.
The current residential market must be viewed against a backdrop where the common view is that the negative trend in house price growth has halted and we are seeing consistent positive growth in house prices, albeit very moderate. We anticipate that nominal house price increases, ie taking inflation into account, will be at levels of around six or seven percent per annum.
Importantly, sentiment around the Soccer World Cup is increasingly upbeat and is having a positive impact on foreign direct investment. We have seen increased interest from overseas home buyers with sales concluded over the festive season - and we expect the uptake from foreign purchasers to increase leading up to the World Cup but particularly thereafter. The single biggest factor in regard to this anticipated increased demand is the huge exposure South Africa will receive globally.
It is a strong trend that among those who visit our shores on holiday, conference or for whatever reason, there are those who will return and then consider purchasing property here. This is a process which can take several years, and now that we are being elevated onto the world stage during an event which will draw enormous and unprecedented attention to South Africa, we expect that in ensuing years we will see an upturn in investment in property among overseas buyers."
Issued by Gaye de Villiers

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us