Downgrade builds doubt in housing market
Foreign investors seen as less likely to put pen to paper
Property economists haven't yet cut their house price growth forecasts for 2017 given the expectation that interest rates will remain unchanged for the rest of the year. But that doesn't mean the already weak residential property market will simply shrug off South Africa's newly designated junk status. FNB property strategist John Loos and Absa Home Loans property analyst Jacques du Toit are, for now, both sticking to their early January forecasts of house price growth of around 3.5% for 2017 as a whole - despite President Jacob Zuma's cabinet reshuffle and the subsequent credit downgrade by ratings agencies. That compares to last year's 5% average recorded by both FNB and Absa's housing indices. Loos bases his decision to keep his growth outlook for 2017 unchanged on his view that talk of the Reserve Bank resuming its interest rate hiking cycle this year is premature. "Not enough has happened to justify a rate hike." The rand has held up relatively well given the depreciation of on...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.