Interest rate meeting : No half measures please

Interest rate meeting : No half measures please

South Africa's largest bond originator calls for a full 1% interest rate cut at February's Monetary Policy Meeting (MPC) saying that the time is right for bolder measures.

"Property owners won't benefit from half measures this time," said Saul Geffen, chief executive of ooba, (formerly MortgageSA). "While ooba and South African consumers welcomed the half percent rate cut in December, further rate cuts are necessary in order to relieve homeowners and stimulate the stalling property market."

Geffen points to the dramatic rate cuts around the world to stem the sharp economic slowdown that is also already in evidence in South Africa.

"Several economists have in the last few weeks slashed their growth forecasts to less than 1% for 2009."

A rate cut of 1% will assist overburdened consumers who have been struggling with the high price of debt as well as kick start the stricken property market and restore consumer confidence.

Geffen notes that banks' recent tightening up of lending has compounded the troubles in the housing market.

"Banks have introduced much stricter lending criteria and fewer buyers are qualifying for the full amount of the loan they apply for.

"With interest rates coming down, the recovery of the property market is shifting towards bank lending policies. Banks will need to relax lending in order to facilitate increased demand and prevent further price deflation."

Hello ooba news

The latest oobarometer stats reveal that the average purchase price growth among first-time buyers remains strong at 12.1% in June. This, together with the continued easing in lending criteria, is good news for potential homebuyers in South Africa.

With the property market beginning to show signs of a recovery, it is more important than ever to ensure your home is correctly priced. Jenny Rushin, property finance manager at ooba, SA's leading mortgage originator, said that a property listed at the right price will give sellers the greatest chance of attracting buyers.

South African banks have loosened their lending criteria which has supported a revival in the property market and helped new buyers enter the market says South Africa's leading mortgage originator, ooba.

South Africa's leading bond origination company, ooba, has seen a 55% increase in the value of approved loans from April to September this year, with a 21% surge from August to September alone.

With house price indicators like the oobarometer perking up, smart buyers are slowly returning to the market and need to be armed with how to make the best purchase possible. Ben Seymour-Brown, manager of group direct sales at ooba, said: "We expect more people to return to the property market this year and certainly next as the economy recovers, the effect of lower interest rates is felt and confidence returns to bricks and mortar investment.