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0,5% DROP IN INTEREST RATES REINFORCES THE RECOVERY IN THE PROPERTY MARKET, SAYS DU PLESSIS
The Cape residential property market, already on an exciting recovery path (with sales rising monthly) will be given a further boost by the unexpected but welcome 0,5% drop in the interest rates, says Anton du Plessis, CEO of Vineyard Estates, which is currently enjoying its most successful quarter since 2006.
“This move by the Reserve Bank indicates that they understand only too well the dampening effect that the electricity rates and fuel price rises will have on the country’s growth but they are determined to fight this as much as possible – which is exactly what many economists and most in the property sector have asked for,” said du Plessis.
He added that the Cape residential property market has, in his view, gained a new momentum all of its own and this will result in price rises of 5 to 10% by the end of this year.
“Much of the hesitation and holding back that we experienced last year has now disappeared,” said Plessis. “We are back to the activity levels of 2005”
Just how significant a 0,5% drop in interest rates is for the average Cape Town Southern Suburbs buyer can be seen on a R3 million bond –the monthly payments will be reduced from R29 951,39 to R28 950,64, a difference of just over R1 000. Many middle class buyers are also financing two vehicles as well, so the monthly savings are significant, said du Plessis.
“Another factor well worth considering is that, although small, the drop in interest rates has a bigger effect on sentiment and confidence, which translates into greater market activity,”