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UNCHANGED REPO RATE GOOD NEWS FOR HOUSING MARKET

As anticipated the Monetary Policy Committee has left the repo rate unchanged, which is welcome news as South Africa’s economic recovery remains sluggish while consumers contend with further fuel, food and energy price hikes.

Despite the fact that some market commentators are predicting an increase in the repo rate later this year (2011), we hope that this will not become self-fulfilling, as consumer-spend remains constrained.

From a housing perspective, while the market activity is steady, reflecting some improvement, access to credit remains restricted, exacerbated by affordability issues. In regard to Pam Golding Properties, sales volumes (unit sales) continue to improve, underpinned by growth in market share. We anticipate achieving ongoing gains in market share as consumers increasingly engage with established real estate brands with a sound track record and extensive network.

Against this backdrop we note that purchasers with high liquidity capitalise on having access to a good selection of properties which offer sound value for money. It is also evident that primary residential property in upmarket, secure estates continues to outperform average price appreciation indicators, irrespective of pricing levels.
With rapid technological advances and consumers’ growing access to a wide range of information and data regarding the property market, it is increasingly apparent that people from all sectors aspire to property ownership as a sound medium to long term investment.

Issued by Gaye de Villiers


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