select
|

2016: What’s in Store for the Property Market?

Economically speaking the latter half of 2015 was on shaky ground; the shock firing of Finance Minister Nhlanhla Nene seriously rattled international confidence in the South African economy, the SARB started raising the interest rates (albeit very slowly) and the drought started putting pressure on food prices. At the threshold of 2016 we’re still dealing with the effects of these events and financial experts are advising the public to tighten their belts in preparation for a trying year ahead.

As these issues affect the national economy, food and fuel prices and the CPI inflation it naturally also filters through to the residential property market. Added to this experts expect the prime lending rate (currently at 9.75%) to increase at the first meeting of the SARB’s Monetary Policy Committee meeting at the end of January. “Any increase will have a negative impact, particularly on those homeowners with 80%+ bonds. Then there is also the expectation of a jump in food prices on the back of the drought and of course increases in the cost of electricity and water – all of which raises costs for home owners”, believes Bruce Swain, MD of Leapfrog Property Group.
 
People Still Prefer to Buy
 
The increased economic pressures might lead one to believe that the rental market will experience more demand in 2016, but according to Swain there seems to have been a softening in the rental market over the past 12 months, especially in the R5,000 to R10,000 range. “This is due to a large number of new developments in the R400,000 to R950,000 price ranges coming onto the market, which people would rather purchase than rent”, explains Swain. He does however go on to state that rental accommodation in close proximity to established urban infrastructure, transport, schools, universities etc will remain in high demand.
 
Hot Zones
 
According to the latest data the Western Cape residential property market has experienced consistent growth over the past year, even though the national property market performance has slowed down somewhat. Swain believes that this is as a result of the migration from other provinces due to perceived better provincial infrastructure and municipal services. Another area he believes will be doing well in 2016 is Midrand – it is becoming increasingly appealing to both business (seeking reasonably priced, central office space) and residential buyers who are looking for affordable housing that’s still within range of Johannesburg and Pretoria.
 
Naturally the Gautrain has also done much to open the area up, not only to business, but to residential property buyers as well, as it's now far simpler to live in Midrand and commute via the train to either Johannesburg or Pretoria (without sitting in traffic or incurring SANRAL toll fees).
 
A number of sectional title developments have sprung up in Midrand suburbs including Country View, Carlswald, Crowthorne, Glen Austin, Halfway House, Halfway Gardens, Vorna Valley, Noordwyk and Randjesfontein with average sales prices ranging between R550 000 and R850 000. Properties with asking prices of less than R550 000 are being snapped up as soon as they become available, with demand far exceeding supply. This is in part because the Midrand property market is also being fed by the nearby Thembisa Township, with first time buyers who see Midrand as an attractive lifestyle option, and those wanting to be closer to work making the move to Midrand.
 
Due to the growing demand and sheer size of the lower to middle income range (up to R2.5 million) Leapfrog Property Group expects this segment of the market to continue showing growth, especially in large urban centres like Johannesburg and Cape Town.  
 
Property in Demand
 
“Unfortunately, the high crime statistics in SA ensures the continued demand for secure living, which gated communities and many sectional title developments offer. I also see a move back to bigger, older homes which will offer families the cost benefits of multi-generational living”, explains Swain.
 
His advice to buyers is to understand what they’re looking for in a property, do the research about the area and the property itself and to get pre-approval for a home loan – all of which places a buyer in a better negotiating position. “It’s also really important for buyers to familiarise themselves with all of the costs involved in the property purchase (from the asking price and transfer duty to the levies, if applicable) and to ensure that they stick to their budget”, advises Swain.
 
When it comes to selling Swain recommends dealing with a reputable agent when setting the asking price (so as to ensure that the property is accurately valued) and to be aware of competing property prices on the market. Swain also believes that, “Well presented homes generally achieve higher selling prices, so spending some time and money on de-cluttering and freshening up the property is advised”.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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