select
|

Real estate set for solid gains in 2015

The residential property market is fairly well-balanced at the moment and prices can be expected to rise by an inflation-beating 8 to 9% in the next 12 months – except in gated estates and certain “hot pockets”, where they are likely to increase even more.
 
That’s the opinion of Lew Geffen, chairman of Sotheby’s International Realty in SA, who says the latest decision by the Reserve Bank to leave interest rates unchanged, combined with lower fuel and food prices, will obviously boost consumer sentiment and the demand for residential property going into the new year.
 
“However, the economy is still weak and over the next 18 to 24 months, we foresee that interest rates will have to move somewhat off the current low levels to attract investment and create employment – and while that will probably not do much to slow housing demand, it will affect housing affordability.
 
“Consequently, we expect that while the banks will be keen to approve home loans, they will maintain their strict credit criteria and keep a tight rein on property valuations, thereby helping to prevent the market from overheating in the face of the current shortage of supply.”
 
Meanwhile, he says, the latest building plan statistics show that developers can be expected to start bringing more new projects on stream early next year and that this trend is likely to gather steam fast, so that by 2016 the stock shortage will be alleviated and buyers will have a greater choice of homes to buy.
 
At the moment, however, the market remains favourable for sellers, although this does not mean that they should be tempted to raise their asking prices to levels that are inconsistent with the market value of their homes. “As mentioned, the banks are still cautious when it comes to property valuations, and in addition to that, today’s buyers are generally well-informed and very value conscious.
 
“Well-priced properties, on the other hand, are moving very quickly because of the supply shortage, and there is thus an excellent opportunity now for existing owners to sell and move on to their next home.”
 
Geffen says the fact that interest rates are still low makes it an especially good time to upgrade to a bigger home or a better area, especially if you have equity in your current home that you will be able to use as a deposit on the new property and so reduce the size of the home loan you require.
 
“Having said that, however, this is no time for prospective buyers to be sitting on the fence and waiting for prices to go down as development activity picks up and supply increases. Firstly, steady increases over the past few years have now put prices back where they were prior to the 2008/ 09 crash, and they are set to stay on an upward course.And secondly, ever-rising building input costs mean that the prices of new homes will always be higher than those of equivalent pre-owned homes.
 
“These considerations, plus the expected small interest rate increases over the next couple of years, will make it increasingly difficult for buyers to qualify for home loans, so they should seek out well-priced properties and decide on a purchase as soon as possible.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Jan 2018
      Many people only start thinking about home-ownership when they are ready to “settle down” or start a family, which is why first-time buyers these days are generally in their mid-30s, compared to those in the previous generation who were usually in their mid-20s.
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK