select
|

Interest rate reduction provides confidence boost

Today’s (19 July 2012) decision by the Monetary Policy Committee to reduce the repo rate is welcome news, providing a confidence boost to the economy as well as the property market, says Dr Andrew Golding, CE of Pam Golding Properties

Although inflation is lower, consumers continue to feel the pressure of high and ever-increasing electricity costs – high fuel prices and increasing property rates.


Although banks have eased their lending criteria to some extent, the fact is aspirant home buyers – including those wishing to relocate – are generally having to secure not only the costs associated with home ownership, such as transfer duty, bond costs and the like, in many instances they also need to be able to put down a deposit of around 10 percent. Although interest rates are historically low, the days of many home buyers being able to achieve mortgages at below prime rate are seemingly over, which adds to the burden on consumers to have good cash flows from an affordability perspective. We believe this further reduction in the interest rate will have a positive impact on the property market by providing a confidence boost in terms of sentiment, with cost savings, albeit modest, gradually filtering through into the market. We need to encourage home ownership as a means of financial security for the future, and first time buyers are also faced with having to contend with all the other ‘new’ costs of owning and maintaining a home on a daily basis. As a result, the reduction in the interest rate will be beneficial to this sector of the market in particular.

From a Pam Golding Properties perspective we are seeing a gradual increase in activity and enquiries, with the most activity in the price range up to around R3 million and R4 million. The top end of the market has picked up, particularly in the price range from R12 million upwards, with this sector of the market also seeking good value. While major metropolitan areas such as Johannesburg – particularly northern suburbs and Cape Town – including the Atlantic Seaboard and Southern Suburbs - remain areas of consistent activity in the residential property market, there are signs of slow improvement based on well priced offerings coupled with appealing lifestyle noted in other regions and areas. These include the Garden Route, Kenton-on-Sea and Grahamstown.

Although most buyers are seeking to acquire homes for primary residence, there are pockets of growing interest in the leisure homes market, with many well-located properties along South Africa’s traditional holiday coastline as well as inland offering excellent value at their current prices. Following the collapse of the holiday home frenzy in the boom days, we are now seeing renewed interest in land, and Jeffreys Bay and St Francis have seen significant increase in land sales for building leisure homes.

The North Coast of KwaZulu-Natal, around Ballito, has seen an upturn with the greatest demand for homes on, or close to, the beachfront.  Interestingly, on the KZN south coast, the areas south of Amanzimtoti, such as Pennington and Scottburgh, are showing a shift in buying pattern with about 50 percent of the interest in primary homes within a commuting distance of Durban, and the balance in second homes. Inland recreational centres such as Underberg in the Drakensberg, Clarens in the Maluti mountains and Dullstroom in the Highlands of Mpumalanga have all shown a recovery of the leisure market in the past year. These are primarily areas within a reasonable drive for a weekend away from Gauteng.  In addition, leisure property in the Vaal Dam area has picked up considerably.



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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