Reserve Bank Governor, Gill Marcus, announced after the conclusion of today’s Monetary Policy Committee meeting that the interest rate is to remain unchanged at 9%. The rate has remained unchanged since November last year, when it dropped from 9,5% to its current 9%. The fact that the rate has remained unchanged certainly bodes well for the economy’s stability.
While most remain cautiously optimistic about continued economic recovery, there are definite signs of improvement. Aside from the interest rate remaining stable, The South African Chamber of Commerce and Industry’s Business Confidence Index for January 2011, which is at 87.4, indicates a vast improvement from January 2009 (82.4) and 2010 (81.2).
It is anticipated that 2011 will be a fairly flat year for the property market as debt-to-income ratios are still at a relatively high level and as distressed homeowners continue to make use of the various bank programmes to assist them in selling property they can no longer afford. As there is still limited access to finance, rental markets are expected to peak while qualified buyers will be able to make the most of the property investment opportunities that are currently there for the taking, a situation which certainly won’t last forever as interest rate hikes are expected later in the year.
