Flat repo rate welcomed amidst slow economy
The market expected this decision to be announced given the better than expected consumer inflation figure of 4.6% for June (lower than the market expectation of 4.8), in spite of the weaker exchange rate.
Stuart Manning, CEO of the Seeff Property Group, says the decision is especially good news for property owners with mortgage bonds. He says the fact that consumers have had to absorb a number of cost hikes, particularly the petrol price increases, any interest saving is an advantage.
The possibility of further cost hikes on the back of a weaker currency and petrol price hikes means that there is a good chance for the economy to remain sluggish throughout the year. Manning says this will leave us with an overall shaky property market although there are pockets of good growth in both turnover and prices.
Regardless of the economic challenges, the market is doing well; and while sluggish, there is still growth and many reasons to buy. Many areas are noticing great trade with particularly the lower to mid-market sectors being very busy.
While analysts like to comment on the downside of the market without necessarily weighing the balance, according to Manning there is opportunity in every market. He says that any market is a scale and when one side goes lower, the other goes up.
While rates may be under under pressure, the good news for property owners is that they still rent out their homes and at least continue earning returns. So, if you’re looking to invest in property in Vryheid it’s probably not a bad idea, as the rental side of the market is still holding up well.
