Rate rise – Jeanne van Jaarsveldt

Even though today’s rate increase of 50 basis point represented a triple whammy for the residential property market following on from the June rate increase and the implementation of the National Credit Act the fact that it had been anticipated by the market was likely to soften the impact of its landing, according to Jeanne van Jaarsveldt.

Of more concern to the RE/MAX marketing and financial director was the prospect of further increases, which, he believed would be difficult to absorb. “Right now I believe demand is still sufficiently strong to cushion today’s impact, but there’s no doubt it will force a further slow down in both sale volumes and price growth.” However, he believed house price growth for the year would stay well within real terms.

A positive from today’s rise was that it would give immediate benefit to the rental market and further enhancement to the cash flush buy-to-let market.

Van Jaarsveld believed the impact of June’s increase and the implementation of the NCA had been negatively overstated by the industry. This was based on RE/MAX’s national sales figures reflecting a 11,48 percent increase from R1,265 billion in June last year to R1,41 billion in June this year.

July’s increase in sales volumes of 13,9 percent to R1,308 billion over the same month of last year’s R1,148 billion was even more emphatic evidence against the market’s reported softening in the wake of the NCA.

Current sales to date by the 190-office national group for the period ending July 31 were R9,417 billion. This was up by 14,56 percent on the R8,22 billion posted over the same period of last year.