Property buyers enter 2013 with renewed optimism on repo rate unchanged

Dr Andrew Golding, CE of the Pam Golding Property Group.

Real estate industry watchers and economists agree that the South African residential property market is once again a bright spot in the economy as existing home sales continue to improve due to low interest rates.

The decision by the Monetary Policy Committee to keep the repo rate unchanged at five percent was anticipated by many market commentators.

From a residential property market perspective, the historically low interest rate, which has remained relatively stable in recent years, serves as a confidence booster for home buyers, particularly those with mortgage bonds and who continue to feel the impact of rising energy, fuel and food costs.

Comments Dr Andrew Golding, CE of the Pam Golding Property group: “General market sentiment at the start of 2013 has improved, translating into an air of increased confidence in the residential property market - which in turn is generating increasing enquiries from mainly serious buyers. For the calendar year to date (January 2013) Pam Golding Properties (PGP) has experienced a noticeable increase in website enquiries compared with the same period last year, which is a further indicator of increased activity in the market, particularly as the first few weeks of January 2012 saw an exceptionally high rate of website enquiries.

“While consumers remain faced with cost pressures, the sustained low interest rates are certainly a factor in assisting both buyers and sellers adjust to the ‘new normal’ trading conditions in the property marketplace. As a result we are seeing a regularising in the marketplace, with more and more sellers being those who are doing so for reasons other than financial constraints - in other words normal movement or activity. In regard to buyers, those with cash or high equity are seeking and still in a favourable position to take up good buying opportunities which are available in a variety of locations and offer sound investment potential over the medium to longer term.

“Encouragingly we are seeing more and more first time buyers enter the marketplace, while developers continue to demonstrate growing confidence in launching new developments to cater for a pent-up demand for new-build units in good locations and at market-related prices. There also appears to be indications of increased interest from buy-to-let investors, and looking further afield we are also seeing rising interest from buyers from Africa and other international markets.

“The first quarter of the year is also a time when historically people may be relocating for a variety of reasons, including work or family requirements such as educational facilities, a change in lifestyle, upsizing to a larger home or downsizing as adult children have left the family home. From a price perspective the main interest experienced by Pam Golding Properties is in the price range up to around R6 million or R7 million, although sales upwards of R10 million are also being achieved. All in all Pam Golding Properties’ outlook for the year ahead is positive and we are optimistic,” concludes Dr Golding.