select
|

Outlook upbeat for property market

The outlook for the property market appears upbeat, provided that the interest rate holds, says Seeff chairman, Samuel Seeff.

A low interest rate used to be the core driver of market activity, but our experience over the past two years has been that it has done little to stimulate significant buyer activity. Yet, any indication of an increase now is likely to negatively impact the already low demand. Ideally, we would like to see the Reserve Bank’s Monetary Policy Committee to take a prudent stance when it meets this week and while we understand that there is growing pressure for an interest rate hike, such a move is likely to set us back, says Seeff.

We are encouraged by reports of sales growth from the large agencies and our own 27 percent growth for the year up to April, but attribute this to market share gains rather than any real uptick in market activity. The marginal easing of the lending criteria on the part of banks has also led to more transactions being approved, but we are nowhere near the transaction volumes that would be viewed as normal market activity.

The volume of urgent sale stock continues to impact both normal buyer demand and prices, he says. It is vital for the recovery of the market, that significant progress is made to clear these this year. Only once this has taken place can we return to normal market activity without outside influence to hold back prices.

Market indications are that it remains vital for sellers to price conservatively and in line with what buyers are prepared to pay. Where we have seen sellers heeding the advice of real estate professionals and pricing correctly, properties are selling, not only in the sub R1,5 million market, but also in the upper end of the market.

For now, market conditions continue to favour of buyers, but we anticipate that this balance will start to shift as we enter 2013. Buyers looking to secure good value should therefore take advantage while they can, but should do their homework and buy smart.

Investors looking to make a profit will have to wait out the year to see how the market unfolds, he says. If the bulk of the urgent stock is cleared, the economy remains steady and the interest rate holds at a low level, then we could look forward to some real strength returning to the market towards the end of the year.

As more buyers enter the market, competition will increase and consequently prices. We should then start seeing a return to normal market conditions by early 2014. This however, remains dependant on macro-economic factors including economic and job growth. The prolonged Euro-zone crisis, news that the UK is back in recession and impact of the middle-eastern political crisis on fuel prices also remain worrying factors on the horizon, he concludes.



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    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