select
|

State of the Nation - what does it mean for the property market?

Comment from Adrian Goslett, CEO of RE/MAX of Southern Africa, on the recent State of the Nation Address and its potential impact on the property market

Unemployment and access to finance have been the two dominant factors that have prevented consumers, especially first-time buyers, from entering the property market and investing in a home in recent years.

While it is understood that the financial institutions had to revise their loan criteria in order to ensure responsible lending practices, this has done little to improve the housing needs of the country.

However, the recent State of the Nation Address by President Zuma contained encouraging news for those affected by the housing backlog and those who are unable to gain access to finance, given government’s renewed commitment to grow the economy and continue to tackle unemployment.
Already unemployment levels have seen improvement, with President Zuma pointing to the fact that even during the times of an economic and property boom from 2003 to 2008, unemployment did not fall below 20%. The fourth quarter figures for 2011 indicate that the rate of unemployment came down from 25% to 23.9% as a result of new jobs that were created. During 2011, which was declared as the year of job creation, a total of 365 000 people were employed, which President Zuma declared as the country’s best performance since the recession of 2008.

More importantly, what will undoubtedly have a massive impact on the property industry is the commencement of government funding to promote access to home loans, especially for first-time property buyers. First announced in 2010, this R1-billion guarantee is expected to come to fruition in April this year. To be run by the National Housing Finance Corporation, the guarantee will aid the country’s financial institutions in lending money to people who earn too much to qualify for RDP housing, but who earn too little to qualify for home loan finance.  Furthermore, from April, people earning between R3 500 and R15 000 per month will be able to obtain a subsidy of up to R83 000 to enable them to obtain housing finance from an accredited bank.

RE/MAX of Southern Africa expects that properties at the lower end of the market will show increased demand and increased value growth in the year ahead. Should employment opportunities continue to grow with a strengthening economy and government’s commitment to further reducing unemployment, and should the finance plan to increase opportunities for potential home buyers to access the necessary finance come about, the lower end of the property market will no doubt see even more growth and demand.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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.
    • 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.
        
    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