Paving the way for economic stability

While a cut in the base rate would usually stimulate the market, we are dealing with an unusual situation. A medium-term cut would in any event do little to stimulate large scale buying.

We are nearing at the end of a five year cycle since the introduction of the National Credit Act and anticipate overall transaction levels and prices to remain relatively stable for the year. What we do anticipate however, is that there will be a significant "clearing" of bank and urgent sale stock out of the market. Following this and provided that the economy and interest rates remain stable, we will see some strength returning. More demand and commitment from buyers will see increased competition and sellers becoming less likely to negotiate. Prices will start picking up slowly and pave the way to a balance between supply and demand and recovery of the market.

Seeff anticipates the sustained demand for realistically priced properties to continue. Regardless of the cycle, there is always an underlying demand from those looking to upsize, downsize or move with their jobs. There are keen buyers out there, but with current market conditions still weighted in their favour, they are taking their time and are still looking to negotiate strongly.

Already, he says that Seeff agents in the prime coastal markets have reported an increase in buyer sentiment this year. It seems that many buyers who were holding back towards the end of last year are now ready to make their move.

Although consumers are facing increasing pressure on their household budgets, mortgages are still more affordable than ever, but Seeff says the bargains won´t last. The property market has always had the propensity to bounce back, but this will off course depend to a large extent by how events in the Eurozone unfold this year, he concludes.

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