INTEREST RATE ANNOUNCEMENT - COMMENT FROM HERSCHEL JAWITZ

“Given the current state of both the economy and the residential property market, the decision to keep interest rates where they are was to be expected.

While a cut would have been welcomed, what should be avoided is the rate coming down and then going back up again over a short period of time. A key driver for the residential market is consumer confidence. From that point of view, consistent interest rates probably outweigh the benefits of a short term cut.

With interest rates at historic lows and property prices in real terms more or less at 2007 levels, there are good reasons to buy a home, even without a rate cut. If rates do stay at these levels for 2012, it will continue to give homeowners who are in arrears further opportunity to catch up.  This can only be positive for the market as a whole.”   

Paula Neild is the Marketing Manager for Jawitz Properties South Africa. Contact paula@jawitz.co.za or call 011-880-3550. Jawitz Properties specialise in South African property for sale and property rentals throughout South Africa. Visit http://www.jawitz.co.za for more information.

2012 South African Interest Rates Advanced Comment - Jawitz Properties

Herschel Jawitz CE of Jawitz Properties believes that even without a rate cut by the Reserve Bank this week, this is a still a good time to buy a property in South Africa.

A rate cut would certainly give consumers and buyers a short term impetus to get into the market but what is not needed is a short term cut in rates followed by an increase in rates later in the year. Stability and consumer confidence play a critical part in the residential market. When these factors aren’t there, long term buying decisions go out the window. If rates start to bounce around, people nervous.

With property values in real terms as they were in 2007, and rates still at historic lows, the market is offering value but not bargains. Provided a long term view is taken, now is a good time to buy. The breakeven period has probably increased to five years from the previous three year term given the slow rate at which prices are increasing. Homes are taking time to sell and sellers are still slow to adjust to the market - but in the metro areas there is activity.

Jawitz says that while a rate cut would be welcomed, it would very little impact on the rate at which prices are increasing in 2012.

Paula Neild is the Marketing Manager for Jawitz Properties South Africa. Contact paula@jawitz.co.za or call 011-880-3550. Jawitz Properties specialise in South African property for sale and property rentals throughout South Africa. Visit http://www.jawitz.co.za for more information.