Demand will rise much faster than prices, says Everitt

In real estate terms, 2014 should see the market continuing to strengthen and build on the gains of the past two years, with stock shortages growing and homes selling much more quickly in response to rapidly increasing demand.
“In spite of the sluggish economy and declining consumer confidence, every month sees more prospective buyers streaming into the market,” says Berry Everitt, MD of the Chas Everitt International property group, “and we expect this trend to continue into 2014.
“SA’s population is growing and there is also massive pent-up demand because of the slow rate of new housing development from 2009 until late last year, as well as the tight credit controls exercised by the banks for the past five years.
“There is also a strong sense that the current very low interest rates will not last more than another year, and that prices will start to increase more rapidly as stock shortages grow even more acute, especially in the most popular suburbs of the big cities and metros.”
In addition, he says, many of those who are keen to buy now are still not in a position to qualify for a home loan and will have to continue to rent until they can reduce their debt load or perhaps save a deposit–and that, in turn, is encouraging buy-to-let investors to add further properties to their portfolios.”
“Consequently, we expect to see the overall number of sales continue to climb in 2014, facilitated by an increased appetite on the part of the banks for long-term lending such as home loans.”
However, Everitt says, while it is true that the banks are granting more home loans at the moment than at any time in the past five years, this should not be read as an indication that they have relaxed their lending criteria. “Rather, it is just a reflection of the fact that there are now more prospective borrowers for them to choose from.
“In addition, they are still very conservative in their valuations of the properties for home loan purposes, so we do not expect to see much upward movement in house prices despite all the additional activity in the market.
“Our expectation is that values will grow by around 10% this year in the most sought-after areas, and less in areas where there is less demand and / or no stock shortage as yet. Revenue growth, which has been very strong for the past two years, will thus continue to come mostly from increased volumes of sales.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us