Disappointment in rate retention
According to Dr Andrew Golding, CE of the Pam Golding Property group, “Tuesday's decision to keep the repo rate steady is disappointing, as there is concerted opinion that this would have been a positive move towards helping boost the South African economy and good news for cash-strapped consumers, including home buyers and existing home owners, plus a welcome year-end boost.
“This decision is against the backdrop of the residential housing market performance with its extraordinary highs of three years ago when growth was at 30% per annum, to the calamitous lows where the volume of house price sales fell by 50%. Recently, the market has comprised a period of 6-9 months of slow, steady growth in house price sales, off the bottom point of the market. From a PGP perspective, we continue to see sales volume improve encouragingly.
"It seems likely that this positive trend will prevail as sentiment continues to improve as mortgage lenders begin to re-enter the market and start competing for business. House price growth, which has until recently been in negative territory, has begun to move into positive territory once again and this trend is likely to continue. However, growth in house prices is likely to be moderate at best in the short to medium term (until the end of 2010).
"It also appears likely that interest rates will probably remain flat for the next quarter or two, and then, depending on factors including the inflation outlook, may result in an increase in rates in the latter half of next year.
"On a positive note and as the 2010 Soccer World Cup draws nearer, the manifestations of infrastructural investments eg in stadiums, airports and roads become more apparent by the day and anticipation is mounting in regard to the positive global exposure for South Africa," concludes Dr Golding.
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