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Sarb interest rate decision will hurt economy and property market - Samuel Seeff

21 January 2021 7:52 PM
Tags:
South African Reserve Bank
Sarb
Repo rate
The Money Show
Bruce Whitfield
Property market
home loans
Mortgage
interest rate
seeff
Samuel Seeff
Pandemic
residential property market
rate cut
Prime Lending Rate
Lockdown
COVID-19
property industry
Seeff Property Group

There was ample reason for a cut says the Seeff group. 'We've missed an opportunity' laments its chairperson, Samuel Seeff.

The South African Reserve Bank announced on Thursday that the repo rate will remain at 3.5%.

This leaves the prime lending rate sitting at 7%.

Although this represents an all-time low, the property industry is not happy about the bank's decision.

RELATED: 'Expect another interest rate cut, further boost for R3m + lower property sales'

There is ample reason for a cut given the split decision and missed opportunity in November. Since then, the Rand has strengthened and inflation dipped to 3.1%, the lowest in 16 years. Although expected to rise, analysts believe it will remain below the midpoint of 4.5% providing enough reason for a rate cut.

Statement by Seeff Property Group

The risk of the Reserve Bank not taking the opportunity to provide a stimulus is that the economic impact on employment and household finances could start eating into the gains made last year.

Statement by Seeff Property Group

While the group has not seen the anticipated levels of distressed property sales, the longer the Covid pandemic lingers, the higher the risk says chairperson Samuel Seeff.

Bruce Whitfield interviews Seeff on The Money Show.

I'm grumpy because I think we've missed an opportunity... I think the stimulus for the economy and through that for the property market is absolutely essential for South Africa.

Samuel Seeff, Chair - Seeff Property Group

I would be calling for a quarter per cent now and a quarter per cent in March.

Samuel Seeff, Chair - Seeff Property Group

Seeff describes the surge in the demand for property when interest rates dropped multiple times during 2020, particularly in the middle-to-lower end of the market.

From nothing in April and May when we were fully locked down and unable to trade, we jumped from the June period to where we virtually couldn't cope with the amount of enquiries. Not all of obviously led to transactions but people said 'interest rates are coming down... I can afford to go out and look'.

Samuel Seeff, Chair - Seeff Property Group

It was beneficial for the sellers, buyers and the market and we had an upsurge in transactions that we hadn't seen for four or five years!

Samuel Seeff, Chair - Seeff Property Group

Listen to Seeff's passionate argument on The Money Show:




21 January 2021 7:52 PM
Tags:
South African Reserve Bank
Sarb
Repo rate
The Money Show
Bruce Whitfield
Property market
home loans
Mortgage
interest rate
seeff
Samuel Seeff
Pandemic
residential property market
rate cut
Prime Lending Rate
Lockdown
COVID-19
property industry
Seeff Property Group

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