Tyson Properties’ chairman, Chris Tyson, and chief executive, Nick Pearson, have welcomed today’s decision by the South African Reserve Bank’s Monetary Policy Committee to keep the key repo rate unchanged at 8.25%.
Although this means that the prime lending rate remains at a 14-year high of 11.75%, both Tyson and Pearson said that the decision not to further increase the repo rate would provide more stability for South Africa’s property market and give the country’s consumers some respite from the increasing cost of financing important assets like properties.
“Whilst it cannot be denied that South Africans still have to contend with a high cost of living, rising fuel prices and increased load shedding over the months of September and October, this latest decision by the Reserve Bank is definitely a move in the right direction. I foresee the rate being held now for the remainder of the year with, perhaps, even a slight drop in the new year,” said Tyson.
“We find ourselves in a stable environment at present. The Reserve Bank’s holding the interest rate for the past few months has already sparked renewed confidence. The group is performing well and our Johannesburg operation, in particular, has seen a resurgence in interest. The region had a record month in August with R111 315 000 in sales and rentals,” he added.
Tyson said that, in addition to a more stable financing environment, this resurgence could be attributed to sellers being more realistic with their pricing their properties in what continued to be a challenging market.
“Since the interest rate has stabilised, Tyson Properties has registered some of its best months in the history of the company. We have seen buyers across the board express confidence in the market. There is renewed activity at the higher, middle and lower ends of the market,” Pearson continued.
He said that, should interest rates hold for the foreseeable future which was a strong possibility, Tyson Properties expected and welcomed a sustained surge in the market.
“We expect a busy summer. Another interest rate hold will give buyers far more peace of mind when it comes to property transactions. We expect to see more first-time buyers back in the market as well as an increase in the number of transactions under the R3.5million threshold,” Pearson noted.
He said that although this latest repo rate decision did relieve some of the pressures of buying and selling properties, sellers nevertheless needed to continue to focus on ensuring that their properties were not only realistically priced but well-staged and presented in order to attract buyers in a still highly competitive market.