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 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us