Thursday's decision by the Monetary Policy Committee to reduce the repo rate by half a percent is most welcome, says Dr Andrew Golding, CE of the Pam Golding Property group.

"Firstly, from a property perspective it is hoped that this will provide the banks with the necessary stimulus to further ease lending criteria in order to make a meaningful contribution towards making home ownership more accessible.

"Taking a broader approach however, given that job losses are of major concern and coupled with the fact that consumers are facing looming, significantly increased Eskom tariffs, this reduction in the interest rate is a step in the right direction towards helping boost the economic recovery, which is still very much in its infancy.

"With a strong rand and with inflation targeting on track, both seen against the backdrop of a need to boost GDP growth - the key to unlocking employment opportunities, there remained a strong case for a further reduction in the interest rate.

"Consumer discretionary spending remains constrained and credit remains tight, so we are encouraged by today's decision to reduce the repo rate.

"While the property market in general has improved off the trough experienced in July last year (2009), affordability and bank finance remain key issues for aspirant home buyers," says Dr Golding.

Source: I-Net Bridge