Comment on interest rate announcement

The Monetary Policy Committee chose to continue with its strategy from last year as Reserve Bank Governor, Gill Marcus, announced at the first meeting of the year that the interest rates will remain unchanged.

Adrian Goslett, CEO of RE/MAX of Southern Africa, says that this announcement will be met with relief by consumers who are likely to be recovering from their festive season spending.

He notes that 2012 proved to be an interesting year with an unexpected cut in the prime interest rate bringing it down to 8.5%. He believes it is likely that the interest rates will remain within the current range of 8.5% - 9.5% for the next 12 months.

“The real estate market continued to show improvement throughout last year in terms of both sales volumes and property prices and while lending criteria remained stringent, 2012 was a solid year for real estate across the country. Although some of the same issues that were experienced during 2012 such as high debt-to-income ratios, rising cost of living and a poor savings culture will continue during 2013, pushing demand in the rental market, aspects such as the steady interest rate will bring about opportunity in the housing sector.

House prices will continue to see a measured increase during 2013, especially in the high demand areas and price brackets. Even so, potential buyers who are credit worthy and have access to finance will be able to find property investment options that meet both their criteria and their pocket.

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