Booming US housing market has lessons for SA

News > news - 19 Apr 2006

Against predictions of a slowing property market, US housing starts jumped

14,5 percent to a 33-year high in February, and the major factors that

brought this about are also reflected in the SA economy.

"Low interest rates, higher employment and continued economic growth are

underpinning the US housing market - and we are experiencing similar

economic conditions," says Gerhard Kotzé, CEO of the ERA South Africa

property group.

Kotzé, who has just returned from the annual business conference of the

multinational ERA group held in San Francisco, says the mood in the US is

upbeat, with delegates confident that the housing market bull run is far

from over.

"It's common cause that the housing market, with its huge multiplier effect,

has been one of the major factors in the continued growth of the US economy,

and right now, barring any major shock to the global economic system, the

short to medium term outlook for the US property market - and economy- is

still sound.

"The lesson for South Africa is that the local housing market has to be

nurtured if we want to continue to see solid economic growth.

"Interestingly many US homebuilders have also been saying that they are

offering bigger incentives to lure new buyers into the market and we have

perhaps reached a similar stage in South Africa.

"And in keeping with that, it's arguably time for new Government incentives

in addition to the concessions on transfer duty announced in this year's.


"Here I am thinking along the lines of tax concessions on bond payments or

at least on the interest portion of bond costs, as applies in the UK and the

US, or perhaps even especially-reduced interest rates for home loans."

ERA International now has more than 40 000 agents worldwide. The annual

business conference was attended by more than 6000 delegates, and the

15-strong SA contingent included top agent Angeline van Tonder of ERA Brink

Brakpan and top brokers Chris and Renée Breytenbach of ERA Rustenburg.

Loading comments
share this article