The South African Interest Rate not changing leaves the housing market static says Leapfrog’s Ennik

A decision has been reached by the SA Reserve Bank to keep interest rates unchanged. This comes as no surprise and is in line with the consensus among economists and home market analysts. However, it does not help the residential property sector says Ronald Ennik, a director of the nationwide Leapfrog Property group.

“Given the current economic fundamentals, a cut at this stage may well have been a bold move. Nevertheless, it would have brought a much-needed measure of relief to debt-burdened homeowners. It would also have provided added traction to what has been a generally languid residential property sector,” says Ennik.

“Cash-strapped higher income owners of homes in the upper end of the residential market – which has been the hardest hit by the economic recession – will be particularly disappointed. As long as this sector is in the doldrums, the market recovery as a whole will remain slow,” says Ennik.

“Nevertheless, it is essentially confidence and sentiment – and not interest rates – that are the biggest driver of home buying. Until we see an uptick on that front, the market seems set to remain more or less static in the nearer term, with home values marking time in the lower end of single digit growth,” Ennik concludes.

As there is no drop in interest rates at the moment from the SA Reserve Bank, home owners and buyers alike may not be hopeful for the offerings of the current market that are affected by the South African interest rate; they should, however, never doubt the tried and tested methods of Leapfrog property professionals. As the market has been monetarily depressed by the South African interest rate, we are motivated to work harder to conclude a sale and deliver the results we are mandated to bring.