The decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) to keep the repo rate at 6.50% (therefore, leaving the base home loan rate at 10%) is likely to be a short-term breather as a rate hike may well come sooner than anticipated, cautioned Stuart Manning, CEO of the Seeff Property Group.
He nevertheless regards the MPC decision to keep the repo rate unchanged this time round as welcome relief for the property market.
In his view, the unchanged interest rates should encourage buyers still sitting on the fence to get into the market.
"The flat interest rate, slow price growth, rise in property stock levels and positive bank lending landscape, make it an excellent time to buy," said Manning.
"It is important to filter out the noise and misinformation [on land reform] and focus on facts. It is still safe to invest in property."
He pointed out that, historically, property has outperformed inflation.
"Although the buyers’ market is here to stay for the time being, it offers plenty of selling opportunities, provided the pricing is market related," he said.
READ: SA Reserve Bank keeps repo rate unchanged at 6.5%
Dr Andrew Golding, chief executive of the Pam Golding Property group, commented that, although the MPC did not raise interest rates on Thursday, persistent rand weakness this year, rising inflation expectations and repeated petrol price hikes suggest that the first hike of the new interest rate cycle may occur in late-2018 rather than in 2019 as previously anticipated.
“In a property market largely sentiment-driven, we’ve recently seen evidence of recovery in demand gathering momentum, particularly among first-time home buyers, who will be further encouraged by the steady and relatively low interest rate,” said Golding.
“Given the fact that in the current economic climate consumers in general are cost-focused, price is crucial in the residential property market, so while SA does have a predominantly young population, one has to either rent or own a home, so there is a steady, underlying demand for housing."
He pointed out that value for money is a recurring theme for first-time and repeat buyers alike.