SOUTHERN CAPE PROPERTY NEWS - Seeff Chairman, Samuel Seeff says that although a rate cut would have been better news, the decision by the Reserve Bank's Monetary Policy Committee to retain the repo rate at 5 per cent, is nonetheless welcomed amidst growing market confidence.
Indications are that buyer confidence is up, predominantly in the major metropolitan areas where the gap between supply and demand is beginning to narrow with growing stock shortages being reported. While our turnover for the first part of this year is the best since 2007, we would, however, need to wait until mid-year to assess whether the pent-up demand is seasonal or a sign of positive movement in the market, he says.
The concerns expressed by Governor Gill Marcus around economic growth, inflation, unemployment and high household debt le-vels together with the continued tight mortgage credit criteria will continue to weigh on the market, says Seeff.
We are now in the sixth year since the introduction of the National Credit Act (NCA) and subsequent onset of the global financial crisis(GFC) and while we had hoped to start seeing some real upward movement in sales volumes and pri-ces, it seems that we will have to wait a little longer.
On the upside though, the buyers market conditions are likely to endure at least throughout this year, he says. While timing the market is difficult in view of the uncertain economic outlook, what is obvious is that buyers can still get a good deal and mortgages are more affordable than what it has been in decades.
There is security in bricks and mortar and looking back at house price growth cycles, history shows that the South African residential market has the propensity for significant capital growth.
By buying smartly now, buyers could reap significant rewards once the market turns, he says.
Seeff, however, urges buyers to take a conservative outlook; rather buy below your means and allow room in your budget for future interest rate and basic utility cost hikes.