select
|

Further evidence that interest rate hikes unlikely to reduce residential home sales

A month on month 32% rise in the Rawson Property Group’s recent Western Cape residential sales appears to corroborate a prediction made several weeks ago by Wayne Albutt, Regional Sales Manager for the Rawson Property Group in the Western Cape.

In his earlier statement, Albutt said that the recent rise in the interest rate, although hardly welcome, will almost certainly not result in reduced sales.

His reasoning is based on 16 years of property marketing experience which, he said, had taught him that the crucial factor in home sales is not interest rates but the general state of the economy and the public’s perception of it along with the associated disposable income of the average individual.

“Recent reports,” said Albutt, “indicate that an overall drop in disposable income of 4 or 5% in one year has taken place. However, in home sales this is compensated for by the countrywide increase of incomes in the lower middle group, a spinoff of which is that there has been a marked increase in demand for home ownership at the lower levels. These and other factors lead me to think that the Rawson Property Group Western Cape’s improved sales will be maintained throughout this year.”

Asked if further interest rate rises might not affect sales, Albutt said that the general opinion in the market now is that rates will not be raised by more than 1% in the next six to nine months and by no more than 1,5% before the end of the first quarter of 2015. Rises of this size, he said, are endurable and the market will be able to accept them.

Albutt drew attention to a recent statement of Brian Kantor, Chief Economist and Investment Strategist at Investec, who has opposed any further interest hikes on the ground that they will weaken South Africa’s domestic economy which accounts for 60% of our GDP at any one time. Increased growth, he said, should be the country’s primary objective and this necessitates low interest rates.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    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