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 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    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