Steady repo rate good news

Dr Andrew Golding.

The Monetary Policy Committee’s decision to keep the repo rate steady, rather than increase it, is positive news as South Africa’s economy is still experiencing a slow recovery.

Consumers are having to contend with further fuel increases in April (2012) as well as rising utility and food costs, says Dr Andrew Golding, CE of the Pam Golding Property group.

“The unchanged rate is positive for home owners and home buyers as inflationary pressures have been of concern, raising the possibility of the MPC raising the repo rate – although most recent indications are that inflation has slowed,” says Dr Golding.

“From a property market perspective, as was anticipated, and in comparison to 2011, the year 2012 has seen a first quarter marked by slow but steady improvement in the residential property market across all regions.  And when one considers that 2011 also reflected a general improvement in trading conditions when compared to the previous year, one gains a clearer insight and realisation of the fact that despite ongoing economic challenges, there is a renewed sense of optimism and growing confidence in the market.

“Certainly the appetite for investment in property and in acquiring ownership of one’s own home is notably positive, while developers continue to re-enter the marketplace. South African home buyers who have been waiting in the wings are capitalising on the good selection of stock available in order to make sound acquisitions, and those sellers who understand that market dynamics dictate that only realistically priced properties will be well received are benefiting from the successful conclusion of sales negotiations,” says Dr Golding.

The Pam Golding Property (PGP) group has achieved sales of just over R12 billion for the financial year ended February 2012, which reflects an increase of approximately 12 percent in sales turnover over the previous financial year, and an increase of over 11 percent in units sold. Of significance is the fact that over this period the group’s franchise network has increased sales by 25 percent as the group continues its foray into smaller country towns. Says Dr Golding: “While the group continues to grow its market share in major metropolitan areas, there is increasing activity in smaller towns which are peripheral to these core areas. The demand includes those purchasing with a view to future retirement or an alternate lifestyle, who find the smaller towns more affordable while providing a relaxed way of life.

“It is noteworthy that over the past financial year PGP has seen unit sales in the price band between R6 million and R12 million increase by a significant 21 percent, while unit sales in the various price brackets below R6 million (including homes priced below R800 000) increased on average by 11 percent. This reflects our strength not only in the upper end of the market but increasingly, across all price sectors of the residential property market.”

Concludes Dr Golding: “Overall, our view of the remainder of 2012 remains optimistic, tempered by the reality that the residential property market will experience gradual growth. We are further encouraged by tangible positive sentiment in the market – a key factor impacting on property sales, particularly as we note a new generation of younger buyers emerging, not only with a view to securing their own homes, but in making sound investment decisions for the future.”