Rates decision won’t impact on property market recovery

2010-05-13 15:18

The decision by the SA Reserve Bank’s Monetary Policy Committee not

to cut interest rates was expected and should not have any impact on the

recovery of the residential market, Jawitz Properties said.

Earlier, the bank’s governor, Gill Marcus, announced that the key

repo rate would remain unchanged at 6.5%.

“Interest rates are at a lower enough level to provide an impetus

for the market to gradually recover,” Herschel Jawitz, CEO of Jawitz Properties,


“What is needed more than a drop in rates, is for the banks to

continue to ease their lending requirements and for consumer confidence to

improve especially at the upper and luxury end of the market,” he said.

Jawitz said the lower to middle markets which were most

interest-rate sensitive – up and down – were still finding the going with the

banks tough.

“This will continue to provide a challenge to a quicker recovery in

property prices and volumes.”

On the luxury end, consumer confidence was the key, he said.

“People have to feel good about what they are reading and hearing

before they will think about spending R10?million on a house.”

Saul Geffen, CEO of bond originator ooba, said that the decision to

keep interest rates on hold at 6.5% was expected.

“The decision to cut rates in March was a welcome relief for many

home owners in South Africa.

“However, the Reserve Bank has already indicated that further rate

changes are not likely in the near future so we expect rates to stay on hold for

the rest of the year before gradually increasing in 2011,” he said.

Overall, the signs were increasingly positive for the local housing

market, he said.

“We see a demand-driven recovery, assisted by maintained low

interest rates, a continued recovery in economic growth and a more stable job


“We expect continued growth in house prices in excess of inflation

for the remainder of 2010.”

– Sapa

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

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
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


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.


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.