The decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank to retain the repo rate at 6.75% (home loan base rate at 10.25%) comes as little surprise in view of the weak economic climate, says Samuel Seeff, chairman of the Seeff Property Group.
Although the decision was to be expected, we are nonetheless of the view that a slight drop could have been a welcome boost as we head into the busy festive season for the retail sector. Especially since we received the good news this week that inflation dipped slightly to 4.8%.
Nonetheless, Seeff cautions property stakeholders that this decision underscores the challenges faced by the economy which directly impacts the property market. Inflation and the volatility of the currency remain a concern and there is also the impending threat of further credit downgrades.
Overall, Finance Minister, Malusi Gigaba’s recent mini budget to Parliament painted a subdued outlook for 2018 and, Seeff says that it will be a challenging year for the economy and property market. Home owners, buyers and consumers will have to be astute with their finances and belt tightening will be the order of the day.
By now, stakeholders should be aware that we are operating under tight conditions. While all eyes are on the ANC’s Elective Conference in December, Seeff says that it remains business as usual for the market. Although we are dealing with challenges, property is still holding up well under the circumstances.
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 Seeff says that 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.
Although the property market has shifted and we are entering 2018 with a buyer’s market for most areas, Seeff says that, regardless of the state of the economy, there is opportunity in every market.
History has shown that SA property is a good bet with excellent capital value growth as reported during the 2013-2015 mini boom phase and even into 2016/7 for many areas. The softened price growth and flat interest rate makes it a good time to buy, especially if it is your primary home, concludes Seeff.
Issued by Seeff PR/Media/Content Consultant, Gina Meintjes, 079 886 4802, email gina.meintjes@seeff.com or visit www.seeff.com.