select
|

2015 - a good year for property

2015 is likely to be a year in which the residential property market continues to see significant value growth and to experience conditions in which the major estate agencies achieve increases of at least 20% in their turnover.  

This was said recently by Bill Rawson, Chairman of the Rawson Property Group, who added that in the current scenario, demand for accommodation in all of South Africa’s high density areas still exceeds supply.

The whole of 2015, said Rawson, is likely to feel the benefits of the largely unexpected but big fall in the oil price:  at a Brent Crude price of US$50.04 per barrel, it will, he said, be easy for South Africa to contain its inflation within the 6% target bracket.  (He in fact predicted that inflation will be down to 5,5% by mid-year.)  Furthermore with significantly lower fuel prices, the man-in-the-street will have slightly more disposable income this year and is therefore again likely to turn his attention to home ownership.

The shortage of housing throughout the country, said Rawson, will ensure that year-on-year house price inflation in the high density areas is above 10% and rents will continue to rise by even larger percentages.

However, said Rawson, the lower petrol prices coupled with the startling improvements in fuel saving in today’s cars (Rawson mentioned a new 1,3 litre model on the market with an advertised fuel consumption rate of 5,5 litres per 100 km) should make it possible for home sellers, landlords and developers to operate and prosper further away from the major CBDs.  In the Greater Cape Town area, he said, suburbs like Kommetjie, Simon’s Town, Melkbosstrand, Strand and country towns like Wellington and Paarl could find themselves increasingly incorporated in the Greater Cape Town commuter belt.

Developers, said Rawson, have continued to look for viable densification opportunities in the high density areas – despite the big prices now prevailing – because the call for this type of accommodation remains very strong.  What is significant, he said, is that the skills required to recycle the buildings so as to turn them into suitable accommodation are more and more in evidence and are playing an increasingly big part on the development scene.

Along with the focus on urban areas, there will, too, said Rawson, be an increased demand for energy saving systems – and here the state must be more proactive and promotional because the average man-in-the-street, while recognizing the importance of green energy saving systems, still often does not fully understand them.

Asked if South Africa’s political performance – particularly Eskom’s problems – is proving a deterrent to investment, Rawson said that private enterprise tends to find ways of circumventing these difficulties and coming up with viable alternatives where the state has let them down.  Rawson Developers, he said, will roll out R1 Billion worth of accommodation projects in 2015/2016 and the Rawson Property Group, as indicated, expects to exceed the 21% growth that they achieved in 2014.

Rawson commented that the steady increase in tourists to the Cape will open up marketing opportunities to the more enterprising Cape Town estate agents.

“Last year,” he said, “the Western Cape Institute of Estate Agents reported that a satisfactory number of the area's 1,4 million foreign visitors actually ended up buying a property here.  With the rand at its extremely low levels and with air flights to South Africa becoming easier year by year, I think that this figure could rise over the coming year by 50%.”

Cape Town Tourism report that British Airways will be operating seven additional services between 1st and 11th January 2015 and other airlines, notably Qatar Airways and Edelweiss Air, are also arranging additional flights.  This is yet another sign, said Rawson, that tourism is looking up.

Rawson added that foreigners buying in South Africa are on an easy wicket compared to those buying in many other countries as there are no serious restrictions.  Although foreigners are expected to put down a 50% deposit, they are allowed to gear the rest with a local or overseas bond.   In certain quarters, he said, the selling of property to foreigners is considered unpatriotic.  It should be remembered, however, that such people add significantly to the country’s GDP by the money they spend here and, in his experience, in a small minority of cases end up investing in local businesses, again to the benefit of the country as a whole.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
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.
        
    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