Property market outlook 2015 ‘surprisingly positive’

The property market has fared relatively well in 2014 against the backdrop of an estimated economic growth rate of only 1.4%. “There is pent-up demand for residential property after many years of difficult economic conditions. As such, the outlook for the property market in 2015 is surprisingly positive,” says Rhys Dyer, CEO of ooba, South Africa’s largest bond originator. 
Since the global recession ended, property prices have risen sharply, gathering momentum in the first half of 2014, although this buoyancy has slowed recently as a result of renewed pressure on household disposable income, higher interest rates and subdued consumer and business confidence.

Home-loan approvals remain steady

“We expect to see a stable market for bond approvals in 2015, with some potential for small deterioration as interest rates continue to rise and thus impact the affordability of consumers to purchase new homes,” explains Dyer.
On the positive side, interest rates are still relatively low historically, making now a good time for first-time home owners to gain a foothold on the property ladder, particularly for the aspiring black middle class.
ooba’s home-loan approval rate was 72% in the third quarter of 2014, indicating a consistently high approval rate of seven out of 10 home loan applications.

Demand for property still strong

Dyer notes that demand for property in certain areas remains resilient, in some cases outstripping supply, which has pushed prices up. “There are certainly pockets of residential property that are showing growth in excess of inflation,” he says. “Sectional-title smaller homes close to city centres will likely show greater growth in 2015, both as a result of affordability, but also as a result of lower maintenance and better security, and will be able to demand higher rentals.”
On the whole, Dyer is upbeat about the outlook for the property market next year. “Prevailing conditions are likely to continue for the first six months of 2015,” he says. Even with the challenging economic conditions both internationally and locally, house prices are likely to show modest growth, while rising interest rates will exert some pressure on home-loan applicants.
He concludes by saying that investor interest in the property market remains encouraging. “The buy-to-let market, which has significantly underperformed over the past few years, is likely to show an increase in activity in 2015, to satisfy demand for housing. With the rand under pressure, South Africa remains a relatively cheap property destination for foreign buyers, and we are likely to see more activity in this sector.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us