Repo rate blow for property

LAST week’s decision to retain the repo rate is very disappointing for the economy and property market, Seeff Property Group chairman Samuel Seeff said recently.

“We enter the year on a more positive note and with the improvements in the currency and stability of the CPI rate within the SARB target range, the time is right for a rate cut to stimulate the economy and property market,” he said.

Seeff said the much-awaited appointment of Cyril Ramaphosa as president of the ANC and president-in-waiting of South Africa had boosted consumer and business confidence and was sending a positive message to the market.

“The announcement of a commission of inquiry into state capture, the JSE performing above expectation, improvement in the currency, the petrol price drop all bode well for the year ahead.

‘According to recent media reports, economists are also expecting an improved economy, boosted by higher commodity prices and stronger global demand and rebounds in agriculture, mining and manufacturing.

“Finance Minister Malusi Gigaba also recently hinted that economic growth of 2% was achievable if the government took needed policy decisions including fiscal consolidations and took action insofar as state-owned enterprises such as Eskom and SAA were concerned.

“FNB, too, has signalled that it may be a better year ahead for property.

“The most recent FNB Property Barometer reported that against expectation, the national house price growth rate improved on a month-to-month basis throughout last year from a low of 1.5% year-on-year in December 2016 to 6.1% for December 2017.

“The overall growth rate for 2017 averaged at 3.7% and FNB expects it to be stronger in 2018 at around 5%.

“It therefore follows that a rate cut would have provided an added boost for the economy and market.

“The economic challenges notwithstanding, there will always be activity in the market as people need to buy and sell for a variety of reasons.

“The first few months of the year are usually more active and we would urge those looking to sell or buy to go ahead and do so.

“There is no need to wait, business continues. As the market stands right now, conditions are favourable for buyers and it is a good time to buy.”