Predicting a pendulum swing in rates
Things have been great. They've been great for a long time and especially in property. Surely it must come to an end sooner rather than later. Isn't that what everybody is thinking? South Africans just hate being optimistic and upbeat. I don't know what it is about us that makes us always pinch ourselves to check whether we're dreaming as soon as things are going swimmingly.
Well, for the last two years now people have been calling an end to the property hype/boom/bubble scenario, and, just maybe, this time 'they' might be correct and the party might be coming to an end. Last week saw the Honourable Tito Mboweni rumbling about possible rate increases. Do we take this seriously? I seem to recall that Mr Mboweni makes these rumblings approaching Christmas every year as if he has decided that he needs to step into the shoes of Scrooge and cry 'Bah Humbug!' if no one else can be found for the job.
Or is he following the much more appropriate looking Scrooge of Al Greenspan whose raised rates steadily and mumbles about 'froth' and exuberance in the US housing market? He hasn't bothered much with being a follower of the USA and European economies and has adequately made his policies befitting his own country and our place in the international community.
Calling the rate
The stuff Property Booms are made of.
People need a level on confidence to invest, as we are all too aware that property is a long-term venture and that that mortgage might be your biggest investment ever.
Good and Bad
Maybe I'm an optimist that always sees the silver lining, but if a slight upward tic in rates is what it takes to take the 'irrational exuberance' out of the property market, I'm all for it.
Rental and Rates
All in all, a rate rise might help temper some of the sellers' greed and make investing worth the effort and hassle even if more expensive.
Here's hoping that the party isn't over and rather just edging towards
a newer more sober phase and that when this party is over, we're not
all left with the mother of all hangovers.
Article by: Dave Welmans - (www.thepropertygame.co.za)