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
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    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