PUBLISHED 31 JAN 2010
While expected, the decision by the Monetary
Policy Committee meeting to leave the repo rate unchanged this week
will disappoint many, says Dr Andrew Golding, CE of Pam Golding
Property.
"Although we are seeing some positive indicators it is evident that
South Africa's economy is by no means out of the doldrums, particularly
with the looming outcome of the Eskom tariff decision and concomitant
effect on inflation. So a further boost for the economy would have been
most welcome.
"We are still hopeful, however, that the interest rate may decrease
further during the course of this year. And more than that, what the
market really needs is for the mortgage lending confidence of the banks
to increase. We did see a small improvement in mortgage lending during
the last six months of 2009 but on the whole mortgage lending criteria
are still strict and banks are lending selectively."
On the other hand, he says, last year's reductions in interest rates
can be expected to manifest themselves during this first quarter -
which is traditionally an active period for buying and selling of
property with those relocating for business and other purposes.
"Importantly, sentiment around the Soccer World Cup is increasingly
upbeat and is having a positive impact on foreign direct investment. We
have seen increased interest from overseas homebuyers lately and we
expect the uptake from foreign purchasers to increase leading up to the
World Cup but particularly thereafter.
It is a strong trend that among those who visit our shores on holiday,
conference or for whatever reason, there are those who will return and
then consider purchasing property here.
"This is a process which can take several years, and now that we are
being elevated onto the world stage during an event which will draw
enormous and unprecedented attention to South Africa, we expect that in
ensuing years we will see an upturn in investment in property among
overseas buyers."
Source: Property Trader
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