Batten down the hatches ‘til July, says Berry Everitt
- 21 Jan 2009
Not until July can homeowners and sellers expect the property market to show any real improvement.
That’s the word from Berry Everitt, MD of the Chas Everitt International property group, who says that while the next six months will present many opportunities for brave investors, and should see at least one more interest rate cut, “I don’t think the general confidence that is vital for a resurgence of the market will take hold until the second half of the year”.
He notes that while fuel prices, inflation and interest rates are already declining, it takes six to nine months for consumers to really feel the effects of such drops and for household budgets to ease up.
“In the meanwhile, the national Budget in February is unlikely to contain any major personal tax cuts, and there is an election to get through in April/ May that promises to be full of high drama.
“And on top of that, we are likely to see the banks continue to take a hard line on credit and enforce their 25 to 30 percent deposit requirements, making it really difficult for potential buyers to get home loans and effectively putting a lid on the market.”
But after June, he says, the picture should change. “Hopefully the fallout from the global credit crisis will have settled by then and a turnaround will be evident in the world’s major economies. SA, too, should begin to experience rising economic growth once more with a concomitant rise in employment that is the surest consumer confidence booster.
“Add to that the mounting excitement as we head towards the 2010 Soccer World Cup and we should start to see a steady rise in real estate sales activity and in property prices.”