The recent rate hike means that the property market will have be focussed on affordability.
The recent repo rate hike of 50 basis points comes as no surprise, says Samuel Seeff, chairman, Seeff group. “Consumers should be aware that this is the first of more hikes to follow.”
Seeff says,
Affordability will be the key theme for the property market
adding that “Buyers will be looking closely at prices and driving a hard bargain.”
Looking at the rate hike pragmatically, Andrew Golding, CEO, Pam Golding Property Group, says that although house price growth has slowed, nominal prices are currently at record highs of about R1,386m while the real price, which takes inflation into account, is just 10% off its record highs before the 2007 crisis. “We have a rapidly growing, young population for whom there is insufficient housing, so there is little reason to expect house prices to fall outright.”
Herschel Jawitz, CEO, Jawitz Properties, says, “The 50 basis points mean an increase in repayments of R165 per month per R500,000 of bond. This may not seem significant at first glance, but when added to the previous rate hike it begins to add up.”
Adrian Goslett, CEO, RE/MAX of Southern Africa, says consumers who are over-indebted should seek financial advice and consolidate and pay off short-term debt. Selling a home should be the last option, as property is the one long-term asset that should yield a return over time.
This article originally appeared in Neighbourhood, Sunday Times.
