Comment on interest rate announcement
- 24 May 2012
Adrian Goslett, CEO of RE/MAX of Southern Africa comments on the interest rate announcement.
The decision to keep the interest rate steady will continue to positively boost the economy and particularly the property market, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
It was announced by Reserve Bank Governor Gill Marcus, that once again the Monetary Policy Committee had decided to leave the prime interest rate at its current value of 9%. So far, the low and steady interest rate has brought many more buyers back into the property sector during the first quarter of 2012 and it is expected that the rate will remain untouched at least until the end of the year.
As confidence in the market grows, previously hesitant buyers are entering the market and purchasing property. RE/MAX offices from all regions countrywide have reported an increase in property transactions during the first few months of this year in terms of volumes and values when compared with the same period in 2011. The highest growth reported was in the central region of Gauteng, however, this could be affected later in the year with the introduction of the new e-toll system. Although the toll collection is currently under review, its implementation coupled with the rising cost of living could negatively impact buyers and force them to hold out on purchasing property.
That said, the low interest rates have contributed to consumers reducing their debt and more buyers are now able to show the necessary affordability required by financial institutions to gain access to finance.