select
|

Prospects for house price growth in 2014 satisfactory

As so often happens, says Mike van Alphen, National Manager for the Rawson Property Group’s bond origination division, Rawson Finance, the latest Absa house price review has stimulated speculation as to where the residential property market is heading.

“Those who watch these figures closely have tended”, said van Alphen, “to focus on the 9,3% year-on-year third quarter growth (a significant drop from the 11,4% of the second quarter) in the medium house segment, where the average price now is R1,172,000. The question now being asked is, ‘Will this decline in value continue?’”

The answer to this question, said van Alphen, is in part provided by the Absa Review itself when it says that South Africa’s economic growth rate in 2014 will probably rise by 0,8% to 2,8%, while inflation, now at 6%, will stick close to that level at 5,8%.

“House price growth,” said van Alphen, “is always affected by a whole range of factors impacting on the consumer’s financial position: low economic growth in the country, low savings, impaired credit records and diminished financial confidence. However, if one looks at the broader picture, then two factors become detectable in most housing economy reviews and these are that house price rises, except in exceptionally negative economic conditions, tend at least to keep pace with the national economic growth rate and with the inflation rate. Indeed in most years the house price growth will be a few percentages ahead of the inflation rate, which is one of the reasons why investors find this asset class so satisfactory.”

“While no one would call South Africa’s current or projected growth rate stimulatory, it will at least be better than it has been recently – which augers well for house prices.”

In conclusion, therefore, said van Alphen, although a small further drop in house price growth is just possible before the end of this year, the prospects, in his opinion, remain reasonably bullish.

“2014 will, I believe, see house prices continue to rise by over 8% and this should encourage people to be investing now because in today’s market that sort of return is fairly satisfactory.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
        
    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