select
|

Is a Stable Interest Rate Enough?

The Reserve Bank’s decision to leave the repo rate at 5.5% falls in line with predictions by economists earlier this year. This ongoing stability is good news for the property market which shows indications of improving.

According to the March FNB House Price Index the residential property market has seen some house price acceleration from a revised February growth rate of 7.1% to 8% year-on-year.

The good news continues with the recent FNB Estate Agent Survey in which agents indicate that they too are seeing a shift in the market. The survey attributes the increased optimism to improved demand, as well as some improvement in the balance between demand and supply, or otherwise put an improvement in “pricing realism”.

Whilst banks have indicated their desire to increase their market share in the mortgages section, sellers are more realistic with their asking prices and the interest rate is set to remain stable consumers are facing rising electricity costs, hikes in fuel prices and increases in rates.

Should the proposed increases listed in the budget draft presented by Cape Town Mayor, Patricia de Lille, be implemented locals could see a 11.03% tariff increase for electricity, 15 % for water and 7% for waste removal. Home owners in Durban could face an 11% increase in power and a water tariff increase of 12.5%. In Gauteng consumers are coming to terms with a petrol price increase of 71 cents per litre - 95 grade petrol now stands at R11.94.

Whilst these increases have a definite impact on consumer pockets it’s good to remember that there is a silver lining: the interest rate is currently at a 30 year low and, it’s stable, unlike the 1998 – 1999 period where it was changing significantly every three months. “The market might not be strong at the moment but, home buyers can be grateful that the interest rate remains unchanged. At least in this position everyone knows what’s coming and can work with what they’ve got”, says Jan le Roux, CEO of Leapfrog Property Group.

Le Roux goes on to point out that owning property over the medium and long term always has been, and currently still is, one of the few, if not only, means through which wealth can be accumulated by the general public. All indications are that the market is stable at present and as such buyers are well advised to put pen to paper and not to hold thumbs for a drop in prices. Based on this perspective buyers need to take a long term view, realising that their investment in property will bear fruit regardless of the current economic restrictions.



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 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.
        
    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