 Azar Jammine, the chief economist at Econometrix, said on Friday that the 0.5 percentage point increase in interest rates by the Reserve Bank last week would undoubtedly be negative for new vehicle sales… but property? Rudolf Mahoney, the head of brand and communication at WesBank, said interest rates had now increased by 175 basis points in 24 months, which meant those who had home loans since the start of the rates hiking cycle would now really start feeling the effects. John Loos, a household and property sector strategist at FNB Home Loans, said they had seen recent signs of slowing residential demand growth and the further interest rate hike was expected to sustain a slowing trend. Loos said FNB anticipated house price inflation to decline during the course of this year from recent levels of around 7 percent into lower single digit territory and below consumer price index inflation rates. Samuel Seeff, the chairman of the Seeff group, said there was no doubt the interest rate hike would have a knock-on effect on the housing market, with average price growth deteriorating further. But Seeff said the housing market for now was still fairly healthy, with plenty of demand and show house attendance still at much higher levels than five years ago. "This provides some insulation against some of the economic headwinds. The market is stronger than what it was in the immediate aftermath of the 2008 global credit crisis. Stock levels remain tight and we do not have to contend with the volume of distress that inhibited sales and price growth post 2007/8," he said. Kay Geldenhuys, the manager for property finance processing at mortgage originator ooba, said the latest interest rate hike would result in the repayment of a R1 million home loan over a 20 year term now costing a homeowner an additional R331 a month. Edited from IOL Property published on 1 February 2016 Property http://www.iolproperty.co.za/roller/news/entry/interest_rate_hike_dents_property
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