PLEASE NOTE:

MyNews24 is a user-generated section of News24.com. The stories here come from users.

 
Steeple SA
 
Comments: 1
Article views: 171
 
 
Latest Badges:

 
View all Steeple SA's badges.
 

Property market will be affected by no change in interest rate

09 April 2014, 13:06

It is clear that South Africa is in a rising interest rate cycle and although there is no repo rate increase now, further increases are on the horizon.

South Africa is now almost in a stagflation environment, with upward pressure on inflation but faltering Gross Domestic Product (GDP) growth. It is probably for the latter reason that the repo rate has remained unchanged, because the plummeting Rand is certainly putting pressure on inflation and the conventional response would be to raise rates. By holding off on the rate increase, Reserve Bank Governor Gill Marcus is hoping that the economy can still grow.

The immediate outlook for the property market may be more positive than if the repo rate had been increased, but not materially so. The property market is interest rate sensitive so if rates remain the same then one might expect no real change in the confidence of buyers and sellers to transact.

However, banks will look ahead to the looming further increases and apply even stricter lending criteria. This would mean a drop in the home loan approval rate, and will overly prejudice younger or first time buyers who generally are more dependent on bond finance for a substantial part of the purchase price. It is increasingly likely that we could see properties having to be sold more than once, as bond applications from buyers are declined by the banks.

Demand in the metro areas should remain strong but the stricter lending criteria will result in reduced sales volumes.

The property market has recovered from the dead zone of a few years ago but we can't expect a break-out performance any time soon.

Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.

 

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Read more from our Users

Submitted by
CraigJoseph
Ministers getting spoilt while ev...

Most people in South Africa can only dream of having a house that costs half of the wheels our ministers will be driving. Read more...

0 comments 417 views
Submitted by
Sibusiso Theledi
365 Days of Activism

“Imagine if, for 16 days, there was no rape, no child abuse” - Why only 16 days? Why not 365 days? Read more...

0 comments 38 views
Submitted by
Jazy Pollard
Unusual facts every women should ...

Before you reach out for a bottle of cellulite cream, there are 10 facts about cellulites you’ve probably never heard of before that you have to know now before taking matters into your own hands. Read more...

0 comments 1788 views
Submitted by
Werner Roets180
Dear Julius Malema

We know you and your friends are behind the fees must fall movement. I see Wits has declared an increase in fees for 2017, if you can't even get that right, how are you planning on taking over the whole country? Read more...

0 comments 1883 views
Submitted by
Pieter Carstens
Rottweiler and German Shepherd sa...

My son once unintentionally entered my space and the German Shepherd didn't like it, immediately intervening.  Read more...

0 comments 1329 views
Submitted by
New road rules for SA: 'Reducing ...

'Until road users stop bad behaviour nothing will improve', 'Lowering the speed limit is not going to stop taxis and drunk drivers from killing people'... Wheels24 readers share their views on new proposed road rules for SA! Read more...

0 comments 8193 views
 

services

E-mail Alerts The latest headlines in your inbox

RSS feeds News delivered really simply.

Mobile News24 on your mobile or PDA

E-mail Newsletters You choose what you want

News24 on Android Get the latest from News24 on your Android device.

SMS Alerts Get breaking news stories via SMS.

TV Get us in your home, on your television.

 
Interactive Advertising Bureau
 
© 2016 24.com. All rights reserved.
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.