Interest rates set to decline in 2009 and end of year home moves will provide boost

Tony Clarke, MD Of Rawson Properties, says that a prediction made ten weeks ago about the likely performance of interest rates remains fundamentally valid.

Clarke said in a statement that appears in the Rawson Properties online franchisees newsletter ( that he expects at least a 10% drop in the rates in early 2009.

Asked if this remains his view, Clarke said that he now expects a 100 to 150 base points drop in rates in the second quarter of 2009.

“Many people are saying the drop in the oil price will bring down inflation and while I agree with that it will, as before, take a full quarter to make itself felt – and it will not, I believe, be accompanied by a significant drop in food prices as some have said.”

The SAR Bank, said Clarke, will wait for the full stabilising of the inflation rate to be felt before it takes action on the rates because, in its view, the economy does not need an immediate boost.

The end-of-year selling and buying of new homes that traditionally occurs in November to January will this year probably start earlier because with few bonuses being expected people are not waiting for those and are starting the sale process now while others, who have been retrenched will be looking to scale down.

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