select
|

Jan Davel, MD of RealNet, gives 2013 property market predictions

Jan Davel, MD of the RealNet estate agency group,says household finances are likely to remain under severe pressure in 2013, which will limit the ability of prospective buyers to qualify for bonds and become homeowners.

On the one hand, he says, the increased consumer appetite for credit in 2012 has been matched by aggressive lending in the personal loan environment, and many households will be carrying an increased debt load into 2013.

“Then on the other hand, real disposable incomesare likely to shrink due to such factors as Eskom tariff hikes, rising food and fuel prices, higher municipal rates and the introduction of e-tolling.

“So debt ratios that have been declining will, in many cases, go back up again and choke off demand. Many households will simply not be able to qualify for a home loan, despite the fact that interest rates are expected to stay low in 2013.

“And those same low interest rates will make it difficult even for those without much debt to grow their savings and pay the substantial deposits that banks so often require now in order to grant a loan.”

Meanwhile, says Davel, there still is an abundance of distressed properties being sold by the banks at much-reduced prices – about 80% of current market value, on average – and this will have an additional negative effect on house price growth.

“Consequently, we expect relatively low nominal house price growth during 2013, and negative real house price growth, similar to that in 2012.”

As for the real estate industry, he says, this will be going through a “detox” procedure in 2013, as current real estate practitioners have until the end of 2013 to bring their minimum qualifications up to date, while Continuous Professional Development has also been brought into play.

“These barriers to entry, together with legislation like the Consumer Protection Act, rising consumerism, ever improving technology and a much more efficient Estate Agency Affairs Board will all have an extremely positive influence on the industry, since agents who don’t pay attention to the new training requirements, skills intensities, rules, procedures and market conditions will be unable to keep up with those who have geared up for a more professionalarena.

“In other words the industry will be say good-bye to many of the ‘not-so-good’ operators.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    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