Indications of a property market upturn now manifest

That’s the news from Bruce Swain, MD of the Leapfrog Property Group, who notes that country-wide, property market condi­tions are improving. Signs of an upswing were already manifest in July when the group experienced a general increase in sales across the board.
The trend has seemingly continued with September proving a bumper month with the group recording its best figures since mid 2008. Says Swain: “Willing buyers have been in evidence. How­ever able buyers have been few and far between over the last year thanks to the strict policies imposed by the banks in the wake of the economic fall out.
Reduced interest rates and softer bank lending criteria are now combining to galvanise buyers once more. Indeed, banks’ risk appetite is seemingly mounting with both ABSA Bank and Stan­dard Bank (which comprise 60% of the home loan market) offering 100% loans again. Furthermore serious sellers have become far more realistic from a pricing point of view which is further uplifting the market.”
According to Swain, evidence of the upswing is most obvi­ous in the second and holiday home markets such as Ballito and Gordon’s Bay. For the first half of 2009 Ballito was dead quiet in terms of sales but over the past few months, sales have picked up dramatically with Leapfrog concluding eight deals during Septem­ber alone. Activity has also picked up in Gordon’s Bay where the market had also slowed to a large extent.
Areas such as Ballito and Gordon’s Bay are usually hardest hit by any economic upheaval given the fact that the majority of homes in these areas are luxury purchases, bought in good times and dropped just as quickly in bad times. Traditional high vol­ume suburbs such as Table View in the Cape are also doing well says Swain with homes priced between R500 000 and R1,2m in particular experiencing significant volume growth. Investors are also returning to the Table View market with a view to purchasing well priced properties for the rental market.
A major benefit of the changes in the property market is that people who were previously renting can now look at buying property once more which inevitably will catalyse liquidity and help kick-start the market as a whole once more. For example, a R600 000 bond which cost R8 213pm to service a year ago, now costs R5, 990 pm, a 25% drop in the monthly cost.
“Overall, affordability is creeping back into the market although we still have a long way to go before there is a full recovery. If noth­ing else, people have learned some hard lessons about savings and money management which will stand them in good stead in the future.”
Leapfrog, SA’s only empowered national real estate group, was launched in June 2007 and has 50 offices and over 350 agents.
Issued by:        Teresa Settas Communications

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