Affordability remains a pressing issue
With an eye on global economic concerns, it was anticipated that the Reserve Bank would keep the repo rate steady, says Dr Andrew Golding, CE of the Pam Golding Property group.
“Inflationary pressures are noted, however and while recent reports of reduced consumer indebtedness are positive, the fact is that South Africans, including home owners, are faced with ongoing fuel and utilities price hikes, as well as increases in property rates,” says Dr Golding.
“The cost of living continues to rise and as affordability remains a pressing issue facing aspiring and existing home owners, it is hoped that the repo rate will remain at its current low levels for the foreseeable future. Indeed, a further reduction in the interest rate would provide a boost for consumer confidence generally.”
Dr Golding says from a Pam Golding Property group perspective the highest demand for homes remains in the R1.5-R3 million price band, while enquiries indicate the growing demand from young, first-time buyers (both individuals and couples) wishing to gain a foothold in the market continues to gather momentum. “While this is positive news and is to some extent is fuelled by a pent-up demand in this quarter , the translation of these serious enquiries into actual sales remains dependent on access to finance, and bank lending criteria preclude many aspiring young home purchasers. Having said that, there are 100 percent loans available to qualified buyers, mainly in the lower and middle sectors of the market, and bank lending has improved year on year.
“In regard to the lower end of the market, in the price category below R1 million, it is encouraging to see that there are a number of exciting new housing products in the pipeline, which will bring more affordable homes into the marketplace. In regard to other, higher price ranges, while new developments are gradually emerging, the new developments market generally remains muted. In addition to affordability, key drivers among home buyers remain access to good schools, places of work and amenities, and security, while more affluent buyers strive to achieve homes which offer a better, more desirable quality lifestyle or sense of community.
“Other trends we are seeing is that there are gradually increasing enquiries for leisure properties or second homes, when compared with the slow activity experienced in this sector in recent years, and we also note rising interest in agricultural farms,” says Dr Golding.