Private Property CEO, Simon Bray and other leading property figures give their views on SARB’s decision to leave the repo rate unchanged.
The South African Reserve Bank’s decision to keep the interest rate unchanged is disappointing but not unexpected, says Simon Bray, Private Property CEO.
“With inflation, a weak rand, ratings downgrades and political uncertainty leading up to the ANC elective conference all major concerns, it is unsurprising that the SARB has adopted a wait and see approach,” says Bray.
“We’ll have a clearer picture of what next year holds for the economy and property market after the ANC conference in December. If the outcome of the conference creates greater stability in the economy, we’ll probably see the property market being boosted in the new year as consumer confidence returns. In the meantime, would-buyers should cut down on spending, reduce debt and save as much as they can, so that they are able to purchase their dream property in the new year,” he added.
Adrian Goslett, Regional Director and CEO of RE/MAX
Adrian Goslett says that the announcement brings some good news for consumers, especially over the Christmas period which is synonymous with overspending. He notes that the news is particularly good for cash-strapped homeowners who should take the opportunity to make the most of this period of interest rate stability.
“Homeowners and potential future buyers should focus on curbing unnecessary spending and starting a savings plan of some kind. Often during low-interest rate cycles, consumers are tempted to take on high-risk investment or debt and are discouraged from saving. However, where possible consumers should use this time to create a financial contingency plan,” advises Goslett.
Herschel Jawitz, CEO of Jawitz Properties
“Our financial and economic woes are self-inflicted and until this changes, the uncertainty will remain and the Reserve Bank will have to take a very cautious view on interest rates. The impact on the market will be negligible as no one really believed we would get a rate cut. The key factor in the current residential market is consumer confidence and not interest rates. When consumers start to feel more positive about the long-term future of the country, they will buy properties. Right now, many ‘would be’ buyers are adopting a wait and see approach. The elective conference in December is going to be the next big milestone for the country and consumer confidence.”
Dr. Andrew Golding, CEO of Pam Golding Properties
Dr. Golding believes that in spite of the economy, there is a sustained appetite in the market for home ownership, especially in major metros and well-located suburbs close to schools, the workplace and all amenities.
“Although at this stage it appears that an interest rate reduction is most likely not on the cards for the foreseeable future, we remain of the view that a further, meaningful cut would go a long way towards alleviating economic pressure on consumers, bolstering investor and business confidence, and act as a stimulus for the residential property market,” he added.
Samuel Seeff, chairman of the Seeff Property Group
Samuel Seeff is also of the opinion that a slight drop would have boosted the economy in the run up to the busy festive season. He also points to the ailing economy as a major challenge to the property market going into 2018..
Home owners, buyers and consumers will have to be astute with their finances and belt tightening will be the order of the day.
“We are buoyed by the onset of the busier summer months and would encourage sellers to be more realistic and negotiable with their asking prices as high seller expectations is cited by most agents as a challenge for the market. While the desire to invest in property is still there, many buyers are hesitant about the future. There is still good demand, especially as we head into the busier first half of the year, and sellers should not wait too long to capitalise on this,” he says.