Dr Andrew Golding Repo Rate and Market Comment

Today’s decision by the Monetary Policy Committee (March 20, 2013) to keep the repo rate stable was generally anticipated by market commentators, says Dr Andrew Golding, CE of the Pam Golding Property group. 

“From a residential property market perspective, Pam Golding Properties (PGP) continues to see a steady, albeit gradual improvement in the market in general.  

“Certainly from a PGP group perspective we are encouraged to report that at close to R1.5 billion, our sales turnover for the month of February 2013 was the highest achieved in any one month since February 2008. We have seen increased activity in all regions around South Africa, as well as via our offices in Africa and Seychelles.

“The market has normalised to some extent, with sellers demonstrating a greater appreciation of realistic pricing of properties amid signs that market sentiment generally has improved – in turn promoting a return to a natural flow of activity as people relocate or make changes in line with lifestyle choices or career requirements, or make sound investment acquisitions.

“We continue to see some areas experiencing stock shortages, which will ultimately boost prices, and find that buyers with access to finance or high cash equity continue to capitalise on favourable buying opportunities.

“Further positive signs include renewed interest in residential developments and long-term investment property purchases, as well as increasing interest in buy-to-let properties. The latter is resulting in pressure on the supply of stock which in turn has the effect of pushing up yields.

“We continue to see first time buyers entering the market, while upmarket sales in excess of R20 million are achieved as high net worth purchasers make acquisitions. We also note renewed activity among returning expatriates and international buyers.

“The resilience of South Africa’s residential property market continues to demonstrate the potential for sound capital growth in the medium to long term, particularly given the prevailing low interest rate environment.  As many investors will affirm, real wealth is created by property ownership,” adds Dr Golding.

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