Flat repo rate welcomed amidst slow economy and property market
The recent decision by the Reserve Bank to keep the interest rate as is for the rest of 2018 has been welcomed by both potential property buyers and owners. With higher living costs affecting household budgets, the property market has fared relatively well and seller, buyer and renters will continue to get decent property deals.
Analysts believe that the Reserve Bank is likely to keep the interest rate flat for the rest of the year. This decision is good news for consumers and property owners, especially those with mortgage bonds, says Stuart Manning, CEO of the Seeff Property Group. 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.
Recent social and political issues such as land expropriation, a weak currency and continuous petrol prices increase has caused foreign and local buyers, particularly higher income buyers hesitant about buying. Experts predict the economy remain stagnant throughout the year, which will in turn leave South Africa’s property market on a downward slope.
Despite these challenges,the property market has still experience some price growth and plenty areas with excellent opportunities, especially in the lower to mid-market sectors. Manning believes any market, while experiencing downsides, will also experience some positives. Sellers can still make a good deal, profits may not be as good as previously expected when a property for sale is marketed, but sellers are still making money.
At the same time, while property sale might be down, the rental market often tends to go up with more demand for rental property. Rates might be under pressure, but landlords can rest assured that they will still be able to find renters for their properties and continue to earn a rental income even if it was not as good as it has been in recent years.
