Economy and property market sluggish but still holding up well
The property market may be under a lot of pressure due to the challenges the economy is experiencing, however, property is still selling and sellers are still making good profits. Keeping the repo rate at its current standing is good news for consumers and property owners according to leading property group.
South Africa’s property market is still holding up well despite of a sluggish economy. The housing market has shown a resilience in spite of the economic challenges, and while slower, there is still price growth and several reasons to buy.
Stuart Manning, CEO of the Seeff Property Group, said the decision by the Reserve Bank’s Monetary Policy Committee (MPC) to retain the repo rate at the current level of 6,50% was good news for consumers who own property, especially those paying mortgages. He said considering the fact that consumers have had to absorb a number of cost hikes, most notably the petrol price increases, any interest rate saving was a windfall.
While the currency change poses a risk of monetary policy tightening, analysts reckon that while inflation is still within the 3%-6% target range, the Reserve Bank is likely to keep the interest rate flat for the rest of the year.
Despite the fact that commentators and analysts usually focus on the downside of the market without necessarily weighing the balance, Manning says an opportunity can be found in every market. “Any market is a scale and when one goes down, the other goes up”, he says.
“While downmarket conditions are often characterised by speculators looking for bargains, it also brings serious buyers, but of course you need to know the difference”, adds Manning. The good news is that even though rates are under pressure, buying a house is still a good investment with great returns.
