Rate hold: Property Sector Confident as Rate relief nears

The South African Reserve Bank's Monetary Policy Committee has maintained the prime interest rate at 11.75%, marking the seventh consecutive meeting without change. MortgageMax CEO, Jors van Niekerk, acknowledges the delay in anticipated rate cuts but remains optimistic about potential reductions later in 2024.

Pam Golding Properties

Andrew Golding PGP, CEO notes the South African Reserve Bank's decision to maintain the repo rate at 8.25%, reflecting ongoing economic challenges despite easing inflation pressures and recent fuel price cuts. The formation of the Government of National Unity (GNU) has strengthened the Rand and tempered imported price pressures, benefiting the housing market. However, household financial constraints persist, dampening first-time buyer activity.

The housing market remains subdued with increased days on market and downscaling due to financial pressures. Anticipation of rate cuts later in 2024 is expected to bolster market sentiment and support a gradual recovery in house price inflation, contingent on global and domestic economic stability.

Seeff Property Group

Seeff Property Group expresses disappointment over the South African Reserve Bank's decision to maintain the repo rate at 8.25% (prime rate at 11.75%), citing adverse impacts on the property market and broader economy.

Chairman Samuel Seeff criticises the prolonged unchanged rates, attributing them to increased financial strain on consumers and stalling economic growth. He highlights significant property value erosion and subdued price growth, especially affecting first-time buyers and homeowners in arrears. Despite current challenges, Seeff remains optimistic about imminent rate cuts, encouraging buyers to capitalize on favorable market conditions before potential price increases and economic recovery.

Rawson Properties

The South African Reserve Bank has maintained the prime lending rate at 11.75%, citing ongoing economic pressures. Leonard Kondowe, National Manager at Rawson Finance, highlights lenders' continued interest in creditworthy applicants, offering favorable home loan terms.

He advises potential buyers to enhance their financial profiles through debt management and savings for deposits, anticipating future rate cuts to stimulate property market activity. Kondowe urges buyers to focus on long-term equity growth amid uncertain rate reductions, emphasizing preparedness for financial challenges ahead.

Mortgage Max comment

Despite stable inflation rates and positive economic indicators, including prospects of decreased headline inflation, the outlook remains cautiously optimistic. Van Niekerk emphasizes the impact of political stability under the Government of National Unity, foreseeing potential benefits for consumers and the property market amid ongoing economic challenges.

Tyson Properties comment

CEO, Chris Tyson, reflects on the unchanged repo rate decision, aligning it with a day of national significance in South Africa. Despite no rate drop, he sees optimism post-election, anticipating future cuts to boost the property market.

Tyson advises buyers to capitalize on current opportunities in lower-priced properties while cautioning sellers on pricing strategies amid competitive conditions. He highlights regional market strengths despite challenges, noting KwaZulu-Natal's robust business confidence and ongoing recoveries in Gauteng and the Eastern Cape.

Looking ahead, Tyson remains hopeful that upcoming rate cuts will stimulate economic recovery and further bolster the residential property sector.

Ooba Home loans

Today, South Africa's Monetary Policy Committee maintained the repo and prime lending rates at 8.25% and 11.75% respectively for the seventh consecutive month. Rhys Dyer, CEO of ooba Group, anticipates potential rate cuts following expected actions by the US Federal Reserve in September.

He cites improved local and US inflation trends, including significant petrol price reductions. Dyer also highlights the positive impact of South Africa's new Government of National Unity on economic sentiment, reflected in a strengthened rand and market optimism. Despite muted property sales growth, Dyer emphasizes banks' competitive home loan offerings, signaling optimism for a market recovery amidst ongoing economic challenges.

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