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Thursday Sep 22, 2011

Interest rate remains unchanged at 9%

At the conclusion of this month's Monetary Policy Committee meeting, Reserve Bank Governor Gill Marcus has once again announced that the interest rate will remain unchanged at 9%.

With some economists foreseeing a possible second dip in the market, South African consumers will welcome the news that the interest rate has not increased this month as predicted earlier this year.

Although house prices continue to reflect the strain of a recovering buyers market, demand has increased and consumer confidence has remained fairly steady in the first three quarters of this year.

While for many buyers access to finance and competing with the stringent lending criteria of the major financial institutions will remain an issue, mortgage finance figures are looking more positive than they have in the past. Since April 2009 the bank approval rate for home loans has increased by 19% to its current rate of 45%, however this is still less than the 80% approval rate we saw in the boom period.

To date, market improvement has led to a 21% month-on-month growth in concluded real estate transactions for RE/MAX in the period of January to August 2011, which is the highest turnover achieved since 2007.

This points to the fact that although we still have some time before the market swings fully into a sellers' market, we are definitely on our way and the market is showing positive and encouraging increases, particularly in the middle sector.

RE/MAX Southern Africa Press Release

    
 

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