"Boo," cries Andrew Golding
Rate cut was needed to stimulate "badly depressed" market.
A reduction in the repo rate would have helped provide a catalyst to stimulate a badly depressed housing market.
It is regrettable that the interest rate now remains static as a reduction would have a positive impact on a housing market which has seen 50 percent of the volume of transactions simply dematerialise, and where values have dropped by at least 20 perc
Having said that, while major lending institutions have, to a large extent, recently expressed their views regarding certain relaxation of the strict lending criteria, the evidence of this occurring in a marketplace in a meaningful way remains limited. Unquestionably, the reduced availability to finance is the single, biggest factor holding back the housing market right now. Perhaps the move towards a more lenient approach to mortgage lending is one which needs to gather momentum before being fully felt in the market.
From a general property market perspective it must be noted that there has been a slow but steady improvement in activity levels between buyers and sellers in the residential property market since the start of the year (2009), and each month has shown an improvement on the preceding one. We hope, and believe this will continue to improve, creating a healthy impetus by the start of next year (2010).
It would certainly seem that we have reached the bottom of the downward trend in house sales, in that the volume of transactions has slowly started to increase, while prices have ceased their downward trend. The Pam Golding Properties group's sales have increased, with each month reflecting an improvement on the month before for the past six months - in particular July and August 2009, which respectively showed an increase of 15 and 20 percent in sales value over the corresponding months last year (2009). This is off the back of a generally slowly improving market coupled with significantly increasing market share for the PGP group as our operational strategies appears to have taken effect.
Generally we are seeing signs of renewed interest and increasing activity across all sectors of the market - with some areas already experiencing a shortage of stock. Even within the challenging market conditions there continue to be a number of highlights, including record house prices being achieved in a several suburbs and areas such as Cape Town's Atlantic Seaboard, Northern Suburbs in Johannesburg, Grahamstown and Stellenbosch, to name a few.
A further positive signal is that some developers, who are early adopters of the new market conditions, are beginning to take a more optimistic view and are starting to return to the market, albeit in limited numbers. As trading conditions improve the rest are bound to follow.
*Dr Andrew Golding is the CE of Pam Golding Property group
Article from: www.realestateweb.co.za