Monday, 5 January 2009

The night is darkest before the dawn..........thanks Batman.

Oil price, Interest rates & food prices set to decrease…………but so will the value of your home according to some analysts.

For all we know, these so called ‘analysts’ could be the weatherman taking a blind stab at predicting  those clouds on the horizon to be a storm coming / going / never was. (Roulette was never so much fun J) Therefore, sometimes they’re on the money………and sometimes they sidestep their fallibility by using the ‘We could never have predicted the current situation’ line. 

So without taking the moral high ground, here are my thoughts on what’s to come for the property market in the first half of 2009: 

1)      Interest Rate decrease in February 09 (followed by another in June 09):

a.       The MPC meeting in April 09 is tricky, because a change might be controversial as it might smack of the ANC trying to garner votes for the April Elections.

b.      But the SARB is supposed to be autonomous from the ruling party, so we’ll have to wait and see if this is actually the case.

2)      Inflation will fall & return to single digit territory, where it will better reflect the 3 to 6% inflation band set by the SARB:

a.       Holding thumbs that the Rand will not weaken against world currencies & that the oil price remain steady, inflation will remain steady throughout the first half of the year.

3)      Growth will remain in single digits:

a.       Interest rate reductions will provide welcome relief to homeowners & will somewhat revive the residential property market………..but not for long.

b.      Weak economic growth will negate these reductions due to the global economic recession.

4)      April Elections will play a major part in all facets of the market:

a.       The rise & rise of COPE these past few months have the media in a frenzy (another weatherman?) but the political changes won’t be on a wholesale basis. (not until 2014)

b.      The DA will take the Western Cape, COPE will take the Northern Province……but the ANC will still take victory (without their two-thirds majority)

No comments: