The quarter saw no change in the local repo rate, remaining at an all-time low of 3.5%. However, local market jitters over future potential rate hikes have emerged once again, as investors remain concerned about global inflation and the unexpectedly hawkish move by the US FED.
The local favourable interest rate environment has been a boon for the local property sector, aiding it in its recovery from previous lows. However, the sector is still severely depressed as evidenced by its negative medium-term returns (-8.9% annualised over 3 years to June). The property sector faces a systemic shift in demand amid rising online sales activity and as more companies permanently adopt the work from home-based approach. As demand requirements for the post pandemic world unfolds, so will the outlook for the property sector.