Property market feels impact of interest hike, act

The local property market is starting to feel the negative impact of interest rate hikes over the past year. First National Bank (FNB) says property sellers have to wait almost 10 weeks to sell their property and often fail to get the asking price.

Speaking at a media briefing in Johannesburg, FNB Home Loans Chief Executive Jay Kleynhans said the National Credit Act had also put a slight dampener on the market.

The bank's Property Barometer for the second quarter of 2007 slumped to 4.96 points from a two year high of 6.7% reported in the first quarter. Kleynhans says the reduction is evident in the upper end of the market.

"Sales of houses worth millions are few due to the interest hikes; however there is significant activity in the lower end of the market," he says.