Mike Greeff sees the first signs of recovery in the Cape residential property market

Although the latest 1% drop in the interest rate is welcome - and will no doubt give a fillip to the housing market - a further 2% drop, sooner rather than later, is absolutely essential if a genuine recovery in the residential sector is to come about, says Mike Greeff, Chief Executive of Greeff Properties.

“When prime is at 10%,” he predicted, “the market will really start moving. With a little luck we can now expect this before the end of this year.”

There are, said Greeff, signs that optimism is returning to consumers and to the housing sector.

“Like most Cape estate agencies we have seen a noticeable upturn in the number of show house visitors and the banks, on whom the recovery ultimately depends, appear now to be a little more receptive and flexible in their attitude to mortgage bond applications.”

While the recent 1% drop has been encouraging, said Greeff, the South African Reserve Bank’s policy had, in his view, been non-stimulatory and negative.

“Whatever action has been taken has invariably been too little and too late,” said Greeff. “As a result, the South African economy has stagnated for two whole quarters. A fear of creating panic and of inflation seems to have dominated all their thinking. Why we could not have followed the rest of the world in reducing rates drastically rather than minimally and thereby promoting growth (as trade unions have repeatedly called for) I do not understand.”

Greeff added that his agency is in the fortunate position of working in some of South Africa’s most sought-after areas and this has helped them to maintain a satisfactory turnover.

“All through this recession,” he said, “it has been crystal clear that if and when people can get access to bond money, the Southern Suburbs middle, upper middle and top bracket areas are where they want to live. Those not familiar with the Cape may find it difficult to understand just how strong the appeal of areas like Rondebosch, Rosebank, Newlands, Claremont, Tokai, Constantia and Bishopscourt are. They are seen, quite simply, as ideal places to live, raise children and retire. In the whole of South Africa, there is no real competitor precinct with quite the same attraction - and, consequently, these areas have shown an ability to withstand price drops. The stability of Cape Peninsula residential properties has impressed every one of the more knowledgeable analysts to whom I have spoken in the last year.”

Article by: www.greeff.co.za