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Cape Town - The Reserve Bank's decision on Thursday to once again keep the repo rate unchanged at 5% was welcomed by Andrew Golding, chief executive of the Pam Golding Property (PGP) group on Thursday.
“We remain optimistic regarding the remainder of 2013 and expect that interest rates will remain stable during this period," he said.
“Our view is that while the housing market continues to show signs of gradual recovery, underpinned by positive sentiment among home buyers, there are a number of factors impacting on the residential property market, including access to finance."
Although the economic recession caused house sales to slow and fewer new homes to be built during that time, this has now created pent-up demand for homes, he said, particularly in the price bracket of up to R2m or R3m.
Buyers remain discerning and consider their options until the right property becomes available at the right price, resulting in a market which also remains very value-conscious.
“The housing market is very much driven by sentiment. Furthermore, mortgage funding continues to be less accessible than previously and even with interest rates at historical lows, the market has not responded as it would have in the past," said Golding.
For Samuel Seeff, chair of Seeff, the housing market momentum will be boosted by the unchanged interest rate.
"Given the muted economic landscape, the interest rate decision should be seen as highly positive and will hopefully further boost confidence and activity levels in the market," said Seeff.
Seeff is seeing some of the best trading conditions since the 2007/8 downturn and although still largely in the sub-R1.5m primary sector of the market, confidence is growing.
Despite the increased demand, house prices continue to remain at relatively flat levels and with the increased propensity on the part of the banks to grant mortgage loans, conditions remain heavily weighted in favour of buyers.
"Those that wait too long though, may well look back with regret," Seeff said.
"Conversely, while we had over the past three years cautioned that sellers looking to turn a healthy profit should sit tight, conditions are improving."
Especially in high demand areas, correctly priced properties are beginning to sell quite quickly and are achieving better prices than what the case was three years ago.
Dawie Roodt, chief economist of the Efficient Group, said he expected the interest rate not to be changed on Thursday.
"I have some sympathy for central bankers in emerging markets, because, apart from problems in their own economies, they also have to especially take into account the decisions of the US Federal Reserve, which has caused market reactions globally," he said.
Reserve Bank governer Gill Marcus made it clear during her speech that any “overnight developments will be revisited on an ongoing basis”.
She said issues of concern to the MPC include the rand exchange rate, trade unions keeping their expectations unchanged, business sentiment remaining weak, very little net employment creation and consumer demand at a moderate trend.
“Should risks in the medium term outlook deteriorate significantly, the MPC will take the necessary steps, but at this stage it decided to keep the repo rate unchanged,” she said.
- Fin24
“We remain optimistic regarding the remainder of 2013 and expect that interest rates will remain stable during this period," he said.
“Our view is that while the housing market continues to show signs of gradual recovery, underpinned by positive sentiment among home buyers, there are a number of factors impacting on the residential property market, including access to finance."
Although the economic recession caused house sales to slow and fewer new homes to be built during that time, this has now created pent-up demand for homes, he said, particularly in the price bracket of up to R2m or R3m.
Buyers remain discerning and consider their options until the right property becomes available at the right price, resulting in a market which also remains very value-conscious.
“The housing market is very much driven by sentiment. Furthermore, mortgage funding continues to be less accessible than previously and even with interest rates at historical lows, the market has not responded as it would have in the past," said Golding.
For Samuel Seeff, chair of Seeff, the housing market momentum will be boosted by the unchanged interest rate.
"Given the muted economic landscape, the interest rate decision should be seen as highly positive and will hopefully further boost confidence and activity levels in the market," said Seeff.
Seeff is seeing some of the best trading conditions since the 2007/8 downturn and although still largely in the sub-R1.5m primary sector of the market, confidence is growing.
Despite the increased demand, house prices continue to remain at relatively flat levels and with the increased propensity on the part of the banks to grant mortgage loans, conditions remain heavily weighted in favour of buyers.
"Those that wait too long though, may well look back with regret," Seeff said.
"Conversely, while we had over the past three years cautioned that sellers looking to turn a healthy profit should sit tight, conditions are improving."
Especially in high demand areas, correctly priced properties are beginning to sell quite quickly and are achieving better prices than what the case was three years ago.
Dawie Roodt, chief economist of the Efficient Group, said he expected the interest rate not to be changed on Thursday.
"I have some sympathy for central bankers in emerging markets, because, apart from problems in their own economies, they also have to especially take into account the decisions of the US Federal Reserve, which has caused market reactions globally," he said.
Reserve Bank governer Gill Marcus made it clear during her speech that any “overnight developments will be revisited on an ongoing basis”.
She said issues of concern to the MPC include the rand exchange rate, trade unions keeping their expectations unchanged, business sentiment remaining weak, very little net employment creation and consumer demand at a moderate trend.
“Should risks in the medium term outlook deteriorate significantly, the MPC will take the necessary steps, but at this stage it decided to keep the repo rate unchanged,” she said.
- Fin24
