THERE is a strong possibility that interest rates will drop by a further one percentage point this year, says Bill Rawson, chairman of Rawson Properties, the Cape-based property franchising group.

"This does, I know, go against what I predicted only a month or two back," said Rawson, "but with the rand still showing such surprising strength against the dollar and the pound and with inflation now likely to be kept below 6%, no other course appears to me to be open to the SA Reserve Bank. They simply can't let gold and other exporters continue to suffer in the way they are doing."

The recent 1.5 % interest rate drop, said Rawson, had kept the Cape property market buoyant but had very definitely not resulted in the rush to buy more property that had been anticipated.

"The man in the street still seems to be distrustful of the lower interest rates and is not sure whether they are a temporary or a permanent phenomenon," said Rawson.

"He is also often, as our figures show, enmeshed in debts that need to be handled before further debts are incurred. These two factors have held back buying in many sectors, not excluding the most upmarket areas."

A further factor now needing attention, said Rawson, was that many previously disadvantaged would-be buyers have had debt judgments against them which disqualify them from obtaining mortgage bonds.

"We all know that the government wants to include more people in the home-owning sector but until the banks find some new way of assessing debt applications on their own account rather than automatically cancelling them because of previous repayment failures we will continue to see a significant number of new would-be buyers failing to get the bonds they want."

Rawson is about to visit the US and Australia as a guest of the national estate agency bodies in both countries. For further information please contact Bill Rawson on 021 657 3500