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Thursday May 03, 2012

'Interest rates likely to stay low'

The South African Consumer Price Index, so closely watched by the economists trying to predict future scenarios, has, contrary to the expectations of many of these commentators, come down in the last two months.

A very welcome wide scale cut -back in spending by the general public, says Bill Rawson, Chairman of the Rawson property group, has brought the Consumer Price Index y on y growth down from close to 7% to just on 6%.

This, says Rawson, is good news for consumers and for businesses needing credit as it will probably mean that the current ultra-low interest rates so beneficial to buyers on long term credit, especially home buyers, will probably remain in place until well into the second half of next year.

Buy-to-let investors, in particular, says Rawson, should now be growing their portfolios while prices and interest rates are at their present levels, especially as the present difficulties faced by buyers and property developers in getting finance are beginning to cause major stock shortages.

"Just over half the homes in Mitchells Plain," says Rawson, "have a tenant, a grown up child lodger or a relative staying with them and this type of situation is becoming increasingly evident in middle and upper bracket homes.

"All of this, of course, means that if and when the banks increase their mortgage funding, the take up of homes across the board will rise - in line with the already highly improved rents that investors are beginning to achieve."

Rawson Property Press Release


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