The Monetary Policy Committee (MPC) announced at their latest meeting that interest rates will remain unchanged at 8.25% (repo rate) and the prime lending rate at 11.75%.
According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, growth within the property market will remain muted until the rate cuts materialise, which many economists predict might occur in September or November this year.
“While the market overall has been subdued owing to high interest rates and affordability concerns, the property market is still active. In fact, looking at how the RE/MAX SA network has performed, as at end June, we are 0.75% up on number of units sold compared to last year. We are also 4% up on registered sales totals and 10% up on reported sales totals compared to last year. Although this is not true for all in the industry, RE/MAX SA continues to show growth despite the challenging market conditions,” says Goslett.
High interest rates have meant that buyers are trying to be less reliant on home financing. BetterBond’s July Property Brief reveals that after the modest improvement in new home loan activity that started during Q1, Q2 reflected zero growth.
“With interest rates as high as they are, affordability is an issue for most buyers. Sellers who acknowledge this and price the home at fair market value typically do not have a problem finding a qualified buyer,” says Goslett.
Goslett also remains positively optimistic about what the coming months will bring. “With the markets responding so positively to the GNU, I am hopeful that we will soon see the first interest rate cut and the start of better market conditions overall,” he concludes.
