A Stable Repo Rate in South Africa is a Raft in the Stormy Sea of Economic Uncertainty, Says Greef Properties

“The stable repo rate comes as something of a raft in a particularly stormy sea given the global economic uncertainty, local labour relations tensions and the volatile Rand,” says Mike Greeff, CEO of Greeff Properties, the exclusive Affiliate of Christie’s International Real Estate in Cape Town, South Africa. “Increasing household costs have and will continue to affect the property market, however people will continue to move to bigger houses as families grow, and they will sell to downscale as children leave home,” says Greeff.

Greef adds however that the current economic scenario would indicate that property selling prices are unlikely to rise this year or even in 2014. “Governor Gill Marcus has suggested a possible 0.3 percent acceleration in domestic growth in 2015, though, but in the meantime, the buyer’s market prevails and the rental market, particularly in the Western Cape, remains extremely buoyant, so buying to rent, particularly if the property is close to schools, business centres and public transport continues to be a good investment strategy, albeit a long-term one,” says Greeff. He says that the weaker rand should bode well for foreign investment, but shaky labour relations continue to erode at what might be a growing sector.

“Clem Sunter’s call for an economic “CODESA” is spot on, the associated risks of work stoppages and excessive wage increases are just a few of the issues negatively affecting domestic and foreign confidence, and government has to start working with business to find a way forward, ” says Greeff.  “In spite of negative trends, Cape Town does remain a favourite for property investors, and homes in both the luxury market and more affordable lock-and-go sectors are still being sought after by foreign nationals,” says Greeff, adding that The Mother City’s status as Design Capital of the World 2014 is likely to spotlight the city, giving the property market an extra boost.

Greeff’s recent sales to non-residents include a Bishopscourt property which sold for R16.5 and a Constantia Upper Property which sold for R22 million.