With all eyes being on Friday’s announcements by the credit ratings agencies in respect of a possible further downgrade for South Africa, as was widely anticipated, the Monetary Policy Committee adopted a ‘wait and see’ approach and kept the repo rate steady.
With consumer inflation seemingly under control, but with this month’s (November) fuel hike and Eskom seeking a dramatic escalation in tariffs, coupled with political uncertainty ahead of the ANC elective conference in December and the likelihood of the US Federal Reserve raising interest rates before the year-end, the MPC was expected to take a hawkish view.
Meanwhile the housing market, despite the fact that cash-strapped consumers could well do with a reduction in their mortgage bond repayments, continues to reflect a sustained appetite for home ownership, particularly in the major metros and conveniently located, high demand nodes – close to schools, the workplace and all amenities.
With the festive season almost upon us, we are confident that South Africa will enjoy a buoyant tourist season, especially among domestic visitors. Apart from enjoying some much-needed rest and relaxation, these are often times when buyers consider their property options and choices for the New Year, whether these be for permanent relocation for career purposes, an improved quality lifestyle, future retirement, or simply gaining that first foothold on the property ladder. Coastal property in sought after destinations also comes under the spotlight among those looking to acquire a weekend getaway or leisure property for quality family time.
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.
For further information contact Pam Golding Properties on 021 7101700 or email us.