‘Good time to buy property’

PROPERTY companies say it is a good time to buy property and that although the move by the SA Reserve Bank to keep its benchmark repo rate at 6.75% was expected, the country still needs to cut rates to boost the economy.

Reserve Bank governor Lesetja Kganyago said yesterday that the decision had been unanimous. He cited increased risks to inflation posed by currency weakness, possible credit downgrades and political uncertainty.

S&P Global Ratings and Moody’s are set to review their ratings late today.

“The domestic economic growth outlook remains subdued but positive. Both consumer and business confidence remain low and are also likely to be affected by political developments in December,” Kganyago said.

Samuel Seeff, Seeff Property Group chairman, said that although the decision was to be expected, “we are nonetheless of the view that a slight drop could have been a welcome boost as we head into the busy festive season for the retail sector.

“Nonetheless, Seeff cautions property stakeholders that this decision underscores the challenges faced by the economy which directly impacts the property market.

“Inflation and the volatility of the currency remain a concern and there is also the impending threat of further credit downgrades,” he said.

“History has shown that SA property is a good bet with excellent capital value growth, as reported during the 2013 to 2015 mini boom phase and even into 2016/17 for many areas.

“The softened price growth and flat interest rate makes it a good time to buy, especially if it is your primary home,” Seeff said.

FRIDAY NOVEMBER 24 2017

Herschel Jawitz, the chief executive of Jawitz Properties, said he believed South Africa might have seen the shortest interest rate cutting cycle in South Africa’s history with the announcement that rates are to remain the same.

“Even with the weakening of the rand and the fuel price increases over the last few months, the latest inflation data was surprisingly good. However, too much uncertainty remains in the current environment.”

He said the key factor in the current residential market was consumer confidence and not interest rates.

He said the elective conference in December was going to be the next big milestone for the country and consumer confidence.