Comment on interest rate increase: Herschel Jawitz, CEO of Jawitz Properties

Posted On Friday, 28 January 2022 21:13 Published by
Rate this item
(0 votes)

Herschel Jawitz, CEO of Jawitz Properties, says that today’s rate increase will have a marginal effect on the market.


However, the prospect of further rate increases this year will eventually start to impact on demand at the lower levels of the residential market especially first-time buyers. Since rates fell by 30% to 7% in 2020, a significant portion of the activity in the market has been in the first-time buyer category, supported by a positive lending environment and sluggish price growth, which made for the best buying market in at least a decade.

Even with the latest rate increase, rates are still 2,5% below where they were in March 2020 – still a big number. Even if rates go up to 8% by year end, by South African standards they are still low. Our residential market, while still above 2019 levels, hasn’t experienced the same price growth that other markets such as the USA and UK have seen during the COVID pandemic, where they were also driven by low rates and positive bank lending.

South African residential property remains undervalued and still offers excellent value. The middle- and upper-end of the market, which are less rate sensitive and have experienced increased activity in the last year, should continue to remain firm. Jawitz says that the South African Reserve Bank has sent out the right message – one of prudence and consistent policy. If consumers know what to expect, they can plan for it. All markets, including the residential market, don’t like uncertainty.

Last modified on Wednesday, 09 February 2022 21:24

Most Popular

Should you rent or buy your business premises?

Jun 23, 2022
Malusi Mthuli_FNB
This is a question that most business owners will face at some point in their journey.…

April 2022 Hotel Accommodation Income Statistics continue to show a very weak picture compared to pre-lockdown times.

Jun 23, 2022
Hotels Monthly Income 2022
The StatsSA release of April 2022 preliminary monthly tourism statistics show the Hotel…

South Africa’s inflation exceptionalism: can it last?

Jun 23, 2022
Carmen Nel
South Africa is often seen as a high-beta play, be it regarding financial market risk…

Hyprop continues to reduce debt and reposition its portfolios in SA and EE

Jun 30, 2022
Skopje City Mall Playground
Hyprop, which manages dominant retail centres in mixed-use precincts in key economic…

Vaal Mall rolls up its sleeves for pothole repairs

Jun 30, 2022
Vaal Mall crew busy repairing the various potholes making easier access to the Centre.
Vaal Mall is showing their commitment towards their community by stepping up to repair…

Please publish modules in offcanvas position.