The year ahead for the property market

The past year has been remarkable in terms of property prices and sales with RE/MAX of Southern Africa experiencing its highest winter sales figures to date and the highest month in the history of the company during November 2013 with over R1.5 billion sales recorded, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
He notes that although RE/MAX figures are bucking market trends, general sales volumes throughout the property industry are still not at the levels that were seen during the boom. However, the overall property market continues to improve and the number of properties sold each year seems to be on a steady upward trend. “While the recession brought about massive changes in the property market over the last five years, since 2011 the market has normalised and we seem to be on a far more stable and predictable path,” says Goslett.
“That said, it is very difficult to predict exactly what the future holds particularly considering the many variables that can impact the property market that the real estate industry has no control over.”

According to Goslett, to have a more accurate perspective as to what lies ahead for the property market during 2014, there are a few key elements that need to be considered. These are:  
Interest rates:

While the prime interest rate is currently at 8.5%, the lowest that the interest has been since 1973, economists predict that the interest rate will probably see an increase late in 2014. Goslett advises consumers and homeowners to prepare for this by paying down as much debt as possible.
Increase in property prices:

We have already seen a steady growth in property prices this year, with some areas seeing prices that are far beyond what was seen during the boom. “As demand for property grows and stocks deplete, we are likely to see higher prices. Although prices are only expected to grow by single digit percentages during 2014, the fact still remains that they are indeed on an upward trend, and that is not likely to change”, says Goslett. 
Opportunity for new construction

The stronger demand for property in the current market and inventory stocks depleting among existing homes will bring about further opportunity for the construction of more homes and developments, giving buyers further property options during 2014. Buyers who were reluctant to invest in the property market during this year will still see viable property options in the future, although at a higher cost.
Access to finance:

Over the past year, South Africa’s financial institutions have marginally relaxed their lending criteria, which is likely to continue in 2014. “Banks have already started to show a greater lending appetite, which will see a marginal increase next year depending on how the new credit amnesty bill impacts lending practices. The percentage of loan application approvals has seen an increase to over 51%, which is a huge improvement from the 26% seen during 2009,” says Goslett.
He notes that the market could also see a greater number of cash buyers during 2014. “There are many affluent property buyers and investors with the means to purchase property, but have been waiting in the wings to see which way the economic winds will blow before committing.  With a more stable environment and property prices on the rise, these buyers will more than likely take advantage of the improving market.”
Security and amenities will continue to be top priorities

According to Goslett, there is likely to be an increased trend towards security and gated type communities next year, with more and more South Africans pointing to security as their number one priority when choosing where to live. Demand will grow in areas that cater to these sectors of the property market, which in turn will push up prices in these areas far quicker than the average.

“We are also likely to see an increased trend towards smaller or more manageable homes in 2014, with consumers opting for properties that are closer to their needs such as their place of employment, their children’s schools and other amenities like shopping centres and medical facilities. This will of course all be dependent on the consumer’s age, their financial profile and current life stage,” says Goslett. 

He notes that all of these predictions will be largely dependent on and driven by consumer sentiment, which will be fuelled positively or negatively by factors such as the run up to elections, status of labour unrest and various other possible scenarios.
“Although it’s impossible to predict what will happen in the legislative environment, general economic conditions and political issues, we can control how we react to changes in our environment and adapt accordingly. Regardless the conditions we find ourselves in during 2014, historically real estate has proven to be a good investment over the long term and with good research and savvy choices, buyers will find some good opportunities in the property market in the year ahead. South Africa’s property market has returned to normal and is doing well. It is expected that the market will continue on its current path of normal trading conditions in the year ahead, with no massive peaks or lows,” Goslett concludes.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 23 Mar 2018
      Durban’s rightful place on the ‘global map’ has been reaffirmed with the recent launch of the new Durban Monopoly board game. The second city in South Africa to be featured after Cape Town, the Durban edition features well-known landmarks such as Moses Mabhida Stadium, uShaka Marine World and The Pavilion Shopping Centre, among others.
    • 23 Mar 2018
      On Show Days, it's essential that you stand out from the crowd. Highlighting your home's finest features could help turn a browser into a buyer. We take a look at some tips to help you achieve the best possible result.
    • 23 Mar 2018
      After a distinctly lacklustre year during which a flood of new homes entered the market to vie for the diminishing attention of increasingly nervous investors, the housing market in Bedfordview kicked off 2018 with encouraging signs of recovery.
    • 22 Mar 2018
      Sustainability is currently a hot topic in the home and construction sector. In light of the progressing climate change and shrinking resources worldwide, it’s one of the most important issues to consider. Sustainable living is the practice of reducing your demand on natural resources by making sure that you replace what you use to the best of your ability.
    • 22 Mar 2018
      The 1% VAT increase which is set to take effect as of 1 April 2018 has set the country alight with many burning questions, most of which cannot be comprehensively answered by our knowledgeable friend Google.
    • 22 Mar 2018
      The picturesque and oft-misty town of Dullstroom in Mpumalanga belies its name. Judging by the rapidly increasing influx of weekend visitors, many of whom then look to acquire property here, it’s anything but dull, quips Anton Greeff, Pam Golding Properties area principal.
    • 20 Mar 2018
      Located close to the fast growing Fourways precinct, Dainfern continues to attract local and international interest from buyers seeking a secure lifestyle with affordable entry price of approximately R3 million.
    • 20 Mar 2018
      Property owners in the Durban CBD are addressing the affordability challenge that faces many prospective tenants in their area – and reconfiguring the inner city rental market in the process.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us