With inflation under control, it was hoped that the Monetary Policy Committee would today (22 July 2010) reduce the interest rate by a further half a percent. This would have helped provide a stimulus to the economy, particularly amid concerns regarding business confidence and with consumers remaining under pressure as a result of increased electricity tariffs, says Dr Andrew Golding, CE of the Pam Golding Property group.
“Having so successfully hosted the Soccer World Cup and with the resultant global accolades, we have an opportunity to capitalise on the positive sentiment created by this event and the general morale boost South Africa has received.
“As far as the performance of the residential property market is concerned, while the market has improved especially in terms of numbers of transactions, this is off a low base and furthermore there is no marked price movement evident. A further reduction in the interest rate would have provided a much-needed ‘shot in the arm’ for the housing market and would noticeably impact on the market over time, as well as help boost the economy and create further positive sentiment in general.
“From a Pam Golding Properties perspective, while we have seen a 30 percent improvement in sales volumes (ie units sold) year on year to date, key factors hampering the market continue to be limited access to credit and affordability. This means that in the present market, correct pricing of properties is even more critical than ever, as buyers are faced with affordability issues and have a good selection of properties from which to choose.
“Currently we are seeing all price segments of the market faring more or less in a similar fashion, apart from the very high end niche market or über-prime market, which due to its nature, is dictated more by demand based on uniqueness, ultra-prime location and special characteristics rather than price.
“More positively, we note a tangible sense of optimism and air of a new beginning for South Africa and this, coupled with the huge, positive international awareness created through the World Cup augurs well for positive sentiment generally as well as for the property market over the medium to long term,” says Dr Golding.

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