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
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 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.
        
    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