Realtors welcome rate decision
Realtor Jawitz Properties on Thursday welcomed the SA Reserve Bank's decision not to raise interest rates.

"While the decision will obviously not give any relief to homeowners who remain under financial pressure, it will certainly start to stem the tide of falling sentiment," said chief executive Herschel Jawitz.

Recently, there had been some good news with a drop in the petrol price, no power outages and the possibility of a settlement in Zimbabwe, he added.

"This is a far cry from where we were four months ago."

Aside from the financial factors such as interest rates and consumer prices, sentiment played a huge part in the residential market.

"We may be nearing the bottom of the property market - it's not certain when the turn will come, but at least we will have bottomed out."

Another real estate company said the bank's decision signified the beginning of an economic turnaround and would have a significant impact on sentiment and the economy.

"This is momentous for both the economy and the man in the street," said Jenny Dugmore, Director of Colliers Residential real estate in a statement.

The surge in food and oil prices, along with rand volatility, could not be addressed by increasing interest rates, she said.

While maintaining the fine balance between controlling consumer spending and ensuring economic growth was clearly a primary consideration for the government, the impact of the previous rate hikes was harming the economy.

"An additional rate hike would have potentially tipped the balance," Dugmore said.

It was unlikely that the Reserve Bank would reduce interest rates in the near future. While this might be uncomfortable for many it was in the national interest to control inflation, particularly during the current international market turmoil, she added.

The SARB's decision to keep the repo rate steady should have a positive impact on the property market, which had slowed down due to the credit squeeze and general market sentiment.

"Our property prices should remain static for the next year. This will effectively mean that with our current inflation rate, we will probably not see any real price growth over the next year.

"However, South Africa's economic stability and growth will continue to create job opportunities and thereby improve conditions for many people, creating new entrants to the property market," Dugmore said. - Sapa

Article from: www.iol.co.za