Property still selling amid sluggish economy
The economy may be sluggish, but surprisingly the property market is still doing well. Sellers are still closing good deals as they adapt to the fluctuating conditions. While rates may be under pressure, property owners can still expect to earn returns if renting out their property.
The currency fluctuation poses a risk of monetary policy tightening, however analysts say that even though inflation is still within the 3%-6% target range, the Reserve Bank is likely to keep the interest rate at its current standing for the rest of the year.
Stuart Manning, CEO of the Seeff Property Group, said 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 and property owners, particularly those with mortgage bonds. “Bear in mind that consumers have had to absorb a number of cost hikes, most notably the petrol price increases, so any interest rate saving, is a boon, Manning said.
Putting the economic pressure aside, what remains an area of concern for the market is the policy uncertainty around land expropriation. It has made several buyers, especially those at the higher end of the market and those who do not have to buy immediately, hesitant, both domestic and foreign buyers alike.
The fact that we can expect further cost hikes on the back of a weaker currency and petrol price increases means that the economy is likely to remain sluggish for the rest of the year. According to Manning, this will leave us with an overall weakened property market although there are pockets of good growth in both turnover and prices.
If you’re thinking of investing in property in Nelspruit, the good news is that houses are still selling amid the sluggish economy.
