Back to Newsletter of 2009-06-12
Back to Property News Home

WESTERN CAPE INSTITUTE OF ESTATE AGENTS

News from WESTERN CAPE INSTITUTE OF ESTATE AGENTS

1% INTEREST RATE DROP WILL NOT PROVIDE SUFFICIENT ECONOMIC STIMULATION, SAYS WCIEA CHAIRMAN

Recent property press comment has possibly given the impression that the latest 1% drop in the interest rate marks a turning point in the fortunes of the Cape’s residential property sector – but this view is a little optimistic, says Ivan Neethling, Chairman of the Western Cape Institute of Estate Agents.

Neethling said that he sides with those economic commentators who believe that the SA Reserve Bank has almost always acted too late and too conservatively.

“We are now in a full-scale recession,” he said, “and if this is to be countered we should be taking radical measures to stimulate the economy.  A 1% interest rate drop can hardly be described as radical – a further 2% or more drop in interest rates together with other stimulus tools might have had the desired effect, especially if it had been put through two months ago.”

Neethling commented that “the more one sees what is happening in the economy, the more it becomes clear that government and the business sector are worlds apart, operating from two divergent viewpoints.”

“Business sees job creation as vital now – but every month more jobs are being shed – and the situation is not helped by an influx of foreign nationals who often have education and skills that our people lack.  They are able to corner the job market in certain sectors.”

Asked what measures he would recommend for a property sector and general economic revival, Neethling said that together with other Institute members they were advocating:

  • more pressure and/or incentives being applied to the banks to play their traditional roles in property development, special projects and, above all, housing finance at all levels.
  • the issuing of further public works programmes which will employ still more large numbers of people (subsequent to given the interview President Zuma announced plans along these lines).
  • acceptance that public/private sector partnerships can increase the delivery of homes – and other necessary services.

“We are still looking for the sort of stimulus package that will result in serious job creation,” he said.  “The irony of the situation is that, no previous government has ever been as committed to housing and upliftment – let’s now see the action that all have anticipated since 1994.”

For further information contact Ivan Neethling on 083 527 2626 or email startprop@icon.co.za

 

Article by: Startprop