select
|

What lies ahead for the property market in 2018

2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.

Property Market Predictions for 2018

Demand and market activity

“2017 showed a slow but consistent decrease in market activity across the country,” says Clarke, “with the average time on the market increasing to around 16 weeks. This was mainly due to two influences: a decrease in consumer confidence and spending power thanks to our tumultuous political and economic climate, and a reluctance – or inertia – from sellers to adjust their asking prices accordingly.”

While these influences are unlikely to change much in 2018, and their combination will almost certainly continue to depress market activity in the mid- to high-end price bands, Clarke says the outlook for entry-level properties is much more positive.

“No matter what the financial situation, people need a place to live, which means there’s always going to be demand for property,” he explains. “In tough economic times, that demand shifts towards more affordable investments, increasing activity on the lower end of the market.”

As a result, Clarke predicts new developments and entry-level housing to hit the ground running in 2018, and remain a profitable investment in the long term.

Price Growth

In keeping with demand trends, Clarke predicts that the lower end of the property market will likely experience the highest growth in 2018.

“We’ve already seen this trend making its impact felt over the course of 2017, with properties valued under R1million seeing far stronger price growth than those over the R1million mark,” says Clarke. “There are, of course, areas that buck this trend and show excellent price growth in other value bands, but on average, we do expect affordable property to outperform the rest in 2018.”

Finance

Despite 2017’s economic issues, banks are reported to have lightened up on their lending criteria towards the end of the year, which could make things easier for buyers in 2018.

“We’ve seen bonds being granted at better rates than we’ve had for a while,” says Clarke, “and banks are making it easier for entrepreneurs to access housing finance. That’s good news for first-time buyers who are considering getting into the market – they could find very favourable options on the table in 2018.”

For the "Buyer to Be", Clarke strongly advises to save for the highest deposit possible in order to secure a better loan to value ratio, this will inevitably give the buyer negotiating power with the banks in order to achieve the best interest rate possible.

Clarke also points out that affordability is still key, and that consumers should be conservative in their expenditure wherever possible.

“Banks may be tending towards leniency, but they’re far from reckless,” says Clarke. “You’re still going to need to be able to prove financial responsibility and your ability to service a loan. With all our economic uncertainty, I’d definitely recommend erring on the side of caution when it comes to financial commitments, but I do think property remains one of the most stable investments you can make in present circumstances.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 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.
        
    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