Samuel Seeff, chairman of the Seeff Property Group has welcomed the Reserve Bank’s decision to keep the repo rate unchanged at 7.0%, which maintains the prime lending rate at 10.5%. He comments further below:
Seeff says: “This is a necessary measure for stability and avoids punishing overburdened consumers and the economy further.”
“The news of an improved inflation outlook and potential restart of the rate cutting cycle at a later stage is also welcomed. “Seeff says this avoids further shocks to consumers and the economy. “As it is consumers have had to absorb significant cost pressures beyond their control due to imported fuel spikes and excessive electricity tariffs resulting from years of poor governance.”
He says the decision was supported by underlying economic indicators including an improved inflation outlook despite the recent spike to 5%, a lower oil price compared to May, and the strength of the Rand.
“Hopefully the economy can start getting back on track. As it is, the growth outlook has already been downgraded by the Reserve Bank, the IMF, and the World Bank, and we cannot afford a continuation of the economic stagnation and risk of more job losses.”
Favourable market for buyers and sellers
“The decision is also good for the property market, as buyers will not have to face further borrowing cost hikes for now. As it is, we are still seeing overall transaction volumes down by about 18% compared to five years ago, despite resilience in the market.”
“That said, the market remains favourable for buyers and sellers. The higher interest rate following the May hike is temporary, and lending conditions remain fundamentally favourable. Well-positioned buyers who act now can secure good value and establish a foothold in the market before inflation eases and property prices begin their next upward cycle.”
“We have seen encouraging improvement in sales activity across many areas while other areas are facing tight stock levels which is good news for sellers. In many areas properties are selling faster compared to previous years while house prices are still growing ahead of inflation, subject to regional variations.”
