Moody's downgrade: Room for further interest rate cuts

Dr Andrew Golding, CE of the Pam Golding Property group

While a negative development amid an already bleak situation, in a curious twist of fate it probably matters less now than it might have done if it had occurred pre-Covid-19, as the entire globe is currently in entirely unchartered territory, with all economies taking significant strain.

Furthermore, some commentators have pointed out that the market has already largely priced in the downgrade, including a call for a dramatic further reduction in the interest rate in order to bolster the economy, particularly in the wake of the pandemic.

Since the local property market is driven by sentiment, there are bound to be negative effects from the global pandemic, which are likely to remain over the medium to longer term unless whatever stimulus there is available to the economy is provided as a matter of urgency.

Don't lose your home to the lockdown

Gerhard Kotzé  26 Mar 2020

Sellers, buyers still willing to transact

There are still sellers and buyers in the market who are able and willing to transact and technology means that buyers - many of whom now have more available time than before - are able to browse neighbourhoods and properties, in many instances viewing virtual tours of homes while they weigh up all the options, taking into account information and advice on offer via reputable, experienced real estate agents.

We believe that the high demand for accommodation experienced in the sub-R1m price band, where no transfer duty is payable, will remain a meaningful contributor to activity in the housing market, as first-time and other buyers seek affordably priced homes.

As the Deeds Office is currently closed, transactions under way can still be at least partially processed online, ready to be concluded once the lockdown is lifted.

Some positive news is that next month (April), the fuel price is set to drop by almost R2 per litre. The record drop in prices will provide relief to essential services which continue to operate during the lockdown, Eskom which relies on diesel to generate additional electricity, and consumers, once they are able to commute freely once more.