select
|

South Africa ranks third in global price survey

Those involved in the South African residential property sector have repeatedly stated that there are good reasons for confidence in this asset class – and this has recently been reinforced by an analysis in the May 18th issue of “The Economist”. Their survey shows that South Africa now ranks number three (after Hong Kong and Brazil) in global house price growth.

Hong Kong’s year-on-year growth since the fourth quarter of 2007 is listed as 24,5%, Brazil’s at 12,8% and South Africa’s at 11,1%.

Commenting on this, Tony Clarke, Managing Director of the Rawson Property Group, said that even though most economists now accept that South Africa’s house price growth of 11,1 % will drop below 10% in the year ahead, it is a satisfactory figure, being about 5% ahead of the current inflation rate – which, said Clarke, will now break the 6% upper bracket barrier in the next few months.

South Africa, added Clarke is also shown by the analysis to be performing well in relation to such basics as the rent-to-value ratio and the rent-to-income ratio. The survey indicates that in relation to rents, South Africa’s residential property is undervalued by 2%, i.e. there is probably still room for further growth. In relation to incomes, however, they are now over valued by 10%. This latter figure, however, he said, looks fairly healthy when compared to those of Australia (24%), Canada (32%) and France (34%), all of which are likely to see big downward adjustments in the coming year.

“The Economist” report, said Clarke, also shows that of the 18 countries reviewed in the table, prices in 12 countries have risen. Those countries that have seen falling prices, he said, have been France, Japan, Ireland, Italy, the Netherlands and Spain. (Spain’s year–on-year price drop was a staggering 7,7%.)

Clarke commented that it is possibly significant that all of these once buoyant economies were brought down, at least in part, by excessive lending on unsustainable rising house prices, which in turn led to unrealistic valuations.

To the surprise of some, said Clarke, Britain’s housing prices have at last moved into positive territory, with a 0,9% year-on-year increase. This, he said, is clearly due to the factors identified by “The Economist”, notably that cheaper funding for mortgage bond lenders was made possible by the Bank of England, the Treasury - and the introduction of shared equity schemes for buyers unable to meet bond deposit requirements. In addition, said Clarke, considerable optimism has been created by the fact that the government will be introducing partial guarantees on £130 billion of low deposit (i.e. riskier) mortgage loans in 2014.

“While not in any way wishing to encourage irresponsibility in these matters,” said Clarke, “it is quite clear that the focus by the state on housing finance has benefitted the British economy as a whole and perhaps South Africa has something that it can learn from this.”


  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