select
|

Market awaits higher growth, employment

There’s good news and bad news for the real estate industry on the employment front this month, says Berry Everitt, MD of the Chas Everitt International property group.
 
“On the positive side, the new International Business report from professional services group Grant Thornton suggests that SA workers will receive higher wage increases than those in most other countries this year.
 
“This report is based on interviews with 3450 CEOs at the end of last year, and states that about 68% of SA businesses will increase salaries in line with inflation this year, while some 26% plan to award above-inflation increases (compared to only 15% in the other BRICS countries).
 
“And from a real estate point of view, this means that those in employment this year will have an improved chance of being able to qualify for a home loan and afford their own home.”
 
Also encouraging, he says, is recent news from recruitment group Adcorp that income inequality between the races, and especially between blacks and whites, has declined sharply in the past decade, and could be eliminated entirely by 2020 at the current rate of progress, which sees the average white employee’s income rising by 5,3% a year while the average black employee’s income rises by 14,9% a year.
 
“On the negative side, however, employment numbers go up and down like a yo-yo from month to month, demonstrating the lack of sustainable progress being made in creating new jobs in SA and, by implication, an expanded residential property market.

Writing in the latest Property Signposts newsletter, Everitt notes that over the past six months, the net gain in jobs seems to have been only around 20 000, with probably half of those being in the informal sector.
 
“In addition, the latest statistics show that the number of formal employers continues to decline, having shown a drop of 2000 in the last quarter of 2012, and standing now  at10% fewer than at the start of the global financial crisis.”
 
It is thus not surprising, he says, that Absa’s latest SME Index shows an increase in the number of people who are self-employed - to some 1,25m, or 10% of all the working adults in the country.
 
“But while the entrepreneurial spirit shown by these people, often in the face of retrenchment or company closure, is to be admired, we all know that it is notoriously difficult for self-employed people to obtain home loans, so most of them are effectively out of the property market for now.”
 
Consequently, he says, although both housing demand and property prices have been rising steadily for the past few months, the economic growth rate is going to have to rise and send employment numbers up before the next real property ‘boom’ can realistically be expected.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
        
    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