According to Jacques du Toit, Property Analyst at Absa Home Loans, it is not just doom and gloom that is awaiting South Africa\u2019s property market in 2018.<\/p>\n
Du Toit, who recently shared this forecast at a Seeff regional meeting in Pretoria, said that stable interest rates,\u00a0inflation to remain under control,\u00a0steadily rising\u00a0house price growth,\u00a0a gradual improvement in consumer finances with debt ratios edging lower and higher growth in disposable income, are all part of his predictions for the coming year.<\/p>\n
\u201cWhile the economy is out of recession and slightly higher growth is expected in 2018, the property market will\u00a0continue to\u00a0be affected by consumer finances, confidence levels and economic trends that are likely to be driven by political developments\u00a0in the coming year\u201d.<\/p>\n
Du Toit said that housing affordability is to remain a key property market factor, supported by inflation to remain within the 3% – 6% target range\u00a0and some improvement in consumer finances.<\/p>\n
Seeff asked some of its principals in Gauteng to share their predictions and advice for the coming year:<\/p>\n
Steve van Wyk, Seeff\u2019s MD in Centurion, said<\/strong> that the property market’s fortunes will heavily on who is elected as head of the ANC in December.<\/p>\n \u201cIf Cyril Ramaphosa is elected for instance, the market could perform very well because this will have a major impact on market sentiment and business in general.<\/p>\n In return this will lead to more investment by private companies and the economy will benefit and should grow,\u201d said van Wyk.<\/p>\n Charles Vining, Seeff\u2019s MD in Sandton, <\/strong>agreed that the political situation will have a major impact. \u00a0<\/strong><\/p>\n \u201cMuch buyer hesitation has been based on the volatile political situation, and we expect that after the ANC presidential elections in December there will be a renewed confidence in South Africa\u2019s economic forecast.<\/p>\n Property is a medium term to long term investment and so the economic and political landscape has a direct impact on buyers and sellers decisions\u201d.<\/p>\n Vining concluded that the real estate market is cyclical, with peaks and troughs.<\/p>\n \u201cWe currently find ourselves in quite a flat market, but we expect the market to bounce back steadily in 2018. It may be an incremental increase in buyer confidence, but we predict that it will improve with each passing month.<\/p>\n Chris Hajec, Seeff\u2019s MD in Randburg,<\/strong> said he cautiously predicts a much improved year for the Randburg property market compared to 2017.<\/p>\n \u201cBarring any further political upheavals or environmental issues sufficient to have an impact on the economy, increasing consumer confidence and small victories in the economy are slowly starting to entice skittish buyers and sellers out of the economic hibernation they have been in since the end of March and the downgrade.<\/p>\n The upper end of the Randburg market, which consists of properties priced above R2 million, is what is ailing the most currently and what we should see rebounding with the most significant margins.<\/p>\n The higher up the socio-economic ladder you are in South African society, the more likely it is that you have been exercising economically conservative spending in the last nine months.<\/p>\n The \u201cNational Resilience Gene\u201d is about to work its magic as South Africans shake themselves off and realise, as they always do after events like the downgrade and other recent political tensions\u200b, that life goes on and there is a lot of opportunity waiting to be taken advantage of.<\/p>\n And of course, no opportunity when evaluated over time eclipses the benefits to be\u00a0found in owning property\u201d.<\/p>\n Gerhard van der Linde, Seeff\u2019s MD in Pretoria East, <\/strong>says it will be become increasingly important for sellers to understand the absorption rate in their area if they want to make an informed decision before putting their property on the market in the coming year.<\/p>\n \u201cAbsorption rate can be explained as\u00a0the total number of property sales in a defined market segment as well as the rate at which those homes will be selling within a certain period of time. This calculation will give an indication of how long listings will stay on the market before they are sold\u201d.<\/p>\n Van der Linde said that a property will take longer to sell when there are more properties competing with it.<\/p>\n “It is therefore critically important not to place a property on the market at an unrealistic value.\u00a0 It has been proven that the longer it stays on the market, the less attractive it becomes to buyers and could eventually result in a lower selling price,” he said.<\/p>\n
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