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
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 21 Feb 2018
      These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us