Housing market momentum boosted by the unchanged interest rate, says Seeff
Friday, 04 October 2013, 09:08
PROPERTY NEWS - Seeff chairman, Samuel Seeff has welcomed the decision by the Reserve Bank’s Monetary Policy Committee to keep the repo rate unchanged at the historically low 5%. Economic indicators set the trend for whether there is reason to be optimistic and positive market sentiment fundamentally impacts the economy as a whole and especially the property market. Given the muted economic landscape, the decision should be seen as highly positive and will hopefully further boost confidence and activity levels in the market.
The stable interest rate is also a welcome reprieve for home owners, especially in view of the increased pressure on household budgets, says Seeff. It is good news too for both buyers and sellers as the market continues to gather momentum. We are seeing some of the best trading conditions since the 2007/8 downturn and although still largely in the sub-R1,5 million primary sector of the market, confidence is growing. While the pressure on household budgets is undeniable and a rate hike in the not too distant future is likely, there is for now at least plenty to be optimistic about.
Despite the increased demand, house prices continue to remain at relatively flat levels and with the increased propensity on the part of the banks to grant mortgage loans, conditions remain heavily weighted in favour of buyers. Those that wait too long though, may well look back with regret, he says.
Conversely, continues Seeff, while we had over the past three years cautioned that sellers looking to turn a healthy profit should sit tight, conditions are improving. Especially in high demand areas, correctly priced properties are beginning to sell quite quickly and are achieving better prices than what the case was three years ago. Smart sellers could therefore now look forward to a shorter selling time, better prices and can in turn take advantage of the good buying conditions before the market turns, he adds.
On the whole, it remains business as usual for the market and if the momentum of the first half of the year carries through, we look forward to ending the year on a good note. Property remains one of the smartest investments for the ordinary consumer. There is security in bricks and mortar and simply no substitute for owning the roof over your head. It is the foundation of a healthy economy, concludes Seeff.
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