South Africa: Mixed Reaction From Real Estate Industry to Sarb Decision

Sep 22, 2017 | News24WIRE; All Africa

The decision by the SA Reserve Bank's Monetary Policy Committee on Thursday to keep the repo rate unchanged at 6.75% received a mixed reaction from the real estate sector.

The decision means the home loan base rate will remain at 10.25%. Samuel Seeff, chair of the Seeff Property Group, said he hoped to see a decrease of 25 basis points. "At a time of poor business confidence and weak economic growth marred by political instability, a further rate cut would have been an important boost for consumers and the market," said Seeff following the announcement by SARB governor Lesetja Kganyago. "There was certainly every reason to expect a rate cut given the better than expected economic growth of 2.5% in the last quarter and the relative stability of the inflation rate in the targeted 3% to 6% range," he said. While the overall property market was still in a much better place than it was following the 2007/208 global housing crisis, Seeff said persistent weak economic fundamentals were having an impact. "Much of the liquidity is now out of the market and it is becoming harder for agents to transact. Properties are taking longer to sell and buyers are hesitant" he said. Andrew Golding, chief executive of the Pam Golding Property Group, agreed that SA's housing market would have benefited from a repo rate cut. In his view, a reduction would have given a boost to economic activity and growth in the residential property market."Action is needed to help kick-start the economy and boost confidence in general. (A reduction) would have prompted many home buyers who are currently sitting on the fence to commit to purchase decisions," he said. Relief Othe real estate agencies were more sanguine about the rate remaining stable. Mike Greeff, CEO of Greeff Christies International Real Estate said the MPC's decision to leave the current interest rate unchanged was a relief. Read more on All Africa. Source: All Africa