Unchanged repo rate is positive for the property market says Tyson Properties CEO

Today's announcement by the South African Reserve Bank's Monetary Policy Committee that the repo rate will remain unchanged at 8.25% is not unexpected and will see the property market continue to perform as it has during the first half of the year, according to Tyson Properties CEO, Chris Tyson.

He says that greater optimism emerged towards the end of 2023 with markets in Gauteng, KwaZulu-Natal and Eastern Cape beginning to gain traction. This upward trend continued into 2024. The Western Cape market, which has been on a protracted upward  trajectory and is less sensitive to interest rate cuts or hikes, remains buoyant. 

Tyson says the Reserve Bank's decision to maintain interest rates at present levels comes a day after one of the country's most contested general elections.

He agrees with economists who have said that uncertainty regarding domestic inflation outcomes and the continued volatility of the rand during the lead up to the election means that any drop in the interest rate will, at best, take place at year end.

Although most economists have revised growth in 2024 GDP downwards to around 1%, Tyson is more optimistic and believes that now, post the general election, greater certainty about the direction in which the country is moving politically will result in some economic recovery. Should this be supported by a continued reprieve from loadshedding, there is every reason to expect 2024 to end on a more optimistic note.

Tyson says that, since the  repo rate hit a 14-year-high in May 2023, South Africans have been both resilient and patient. Even without a drop in the interest rate, he says that a more stable environment could impact positively on the property market with many potential investors who have been sitting on the fence possibly deciding to enter the market.

The flip side of continued uncertainty and an inflation rate that may hover above 5% for the rest of the year thereby negating the possibility of a rates cut is a continued boom in the rental market. This has already benefitted property investors and will continue to ensure that this remains a buyers' market.