REPO RATE HIKE IS LESS ABOUT DOOM AND GLOOM AND MORE ABOUT CAUTION
Category Property news
“The .5 repo rate hike signals a clear need for belt tightening, but this does not necessarily indicate doom and gloom for the property industry, rather it calls for caution,” says Mike Greeff, CEO of Greeff Properties, Christie’s International Real Estate.
“We anticipate an increase of listed stock, particularly in the middle to lower priced homes which are still mortgaged, since higher interest rates place increasing pressure on limited household disposable income, particularly in the face of climbing inflation,” says Greeff. “The increased stock will, however, still find buyers, given the demand for Cape-based property. Furthermore, there are likely to be an increased number of sellers scaling down and therefore adding to the number of buyers seeking affordable homes,” adds Greeff. “While economic experts predict a leveling off in price increases 2016, demand is also likely to create a buffer and this means Cape properties will more than likely hold their own in terms of value,” explains Greeff.
When questioned about the performance of the luxury market, Greeff says that a number of luxury homes are paid for in cash, but adds that this market sector is also going to remain fairly stagnant in terms of selling price growth. “Sellers should be careful not to overprice luxury homes, since the overlying economic climate could lead to some risk aversion, even in a cash-flush sector,” says Greeff. “On a positive note, the Rand strengthened on the back of the repo rate hike announcement, and this indicates an increase in confidence in financial governance,” says Greeff.
Author: Greeff Properties
