Residential investment properties will weather the economic storm

Over the past couple of months there has been a surge of negativity around the South African economy and the rapid depreciation of our currency, leading on from changes in the finance portfolio of the Cabinet.

This has led to a muted start to the 2016 business year for many, as these events have had an impact on business confidence.

When it comes to residential property, many economists have expressed the view that the South African property market is heading for another crash along with other pessimistic outlooks for residential property performance in the year ahead. However, Chris Renecle, MD of Renprop, is of the opinion that contrary to popular belief, investment-based residential property purchases are the ideal investment option for 2016.

“Renprop has had an exceptionally busy start to the 2016 year, and we expect to remain busy in the months ahead. This is because despite all the doom and gloom predictions for the economy in general and the residential property market in the year ahead, savvy investors are seeing the opportunities that the current market conditions are presenting,” says Renecle.

He explains that the demand for residential property continues to increase, despite challenging economic times as it is in this kind of uncertain business environment that residential property demand flourishes. Renecle also notes that when the stock market is under threat, the residential property market shines, which is exactly what is happening at the moment.

So just what advantages are investors in residential property seeing in the current market? Renecle says that the negative hype around inflation is actually a positive for property investments, as increasing inflation will have a positive influence on property value growth.

The inevitable interest rate hikes are another factor that is said to impact on the property market. “While an increase in interest rates may affect some buyers, particularly those at the lower end of the market who can just afford to purchase a property, they will have little effect on investment-based property purchases.”

Renecle points out that there are a number of suburbs in the northern areas of Johannesburg which continue to experience a pent-up demand for sectional title properties that are close to major business hubs as well as amenities and public transport facilities such as the Gautrain or major highways and byways.

“Sectional title properties in these areas typically benefit from strong rental demand, as well as good positioning which adds to the appreciation potential and investment appeal,” he says.

Renprop will be launching a number of new developments in key areas throughout northern Johannesburg in the year ahead on the back of strong demand.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us