Balwin Properties opts for a better near future as interest rates are expected to fall

October 28 2024 22:30

SOUTH AFRICA

JSE listed Balwin Properties, the sectional title developer released its interim financial results for the six months to end August 2024 and is hopeful that its performance will gain momentum in the second half of the 2025 to end-February 2025. 

Balwin saw its revenue fall 28% to R852.7m. Balwin’s Chief Executive, Steve Brookes said he was optimistic that the group’s prospects would improve.

“As guided previously, this past six months was characterised by higher for longer interest rates and a stagnant economy which continued to impact the housing market,” he said.

Sentiment is however a key driver of the residential property market, and we saw several positive catalysts materialise during the reporting period, including expectations of a lower interest rate cycle and improved confidence following the formation of the Government of National Unity, the continued availability of electricity and a series of petrol price cuts.

“Although these factors did not impact on the results we are reporting on today, they position us well for a recovery in the second half of the financial year, however, it will take time for additional interest rate cuts to fully flow through to the bottom line, as most households continue to battle with rising living costs and pedestrian economy growth.”

Brookes said “buyers and investors who were previously on the fence, are increasingly committing to property transactions following the September interest rate cuts, as demonstrated by a healthy recovery in the group’s forward sales to 743 apartments, up from 688 apartments in August 2023. These apartments are not recognised in the reporting period’s revenue but have been pre-sold for future financial periods”.

alistair@propertyflash.co.za