Despite an uncertain economic environment‚ South Africa’s property market is still an attractive option for investors‚ says property analyst Shaun Rademeyer.
“Despite a number of bleak predictions for both the economy and the residential property market for the year ahead and the somewhat unconvincing plans set out by Zuma in his recent SONA address‚ savvy investors can look to capitalise on the very real opportunities that current market conditions present‚” says Rademeyer‚ CEO of mortgage originator Betterlife.
Residential property demand flourishes when stock markets and other sectors are under pressure‚ he says.
“Despite dips in foreign investor confidence‚ with the falling rand and the threat of ‘junk status’‚ South Africa continues to remains an attractive and affordable property destination for overseas buyers‚ and we are likely to see more activity in this sector.”
Rademeyer says South Africa’s housing shortage will continue into 2016‚ and demand will continue to outstrip supply‚ especially in urban areas‚ making for a more balanced market.
“Ultimately‚ there are still more buyers in the market than sellers‚” he says‚ “and what 2016 may well introduce‚ is a shift from the strong sellers market we’ve experienced in past years to a more balanced market. Whilst the pace of growth is likely to slow‚ and remain in single digit territory‚ the fact is it will still grow!
“In 2015 it was still a fairly aggressive market‚ where decisions needed to be made quickly‚ but with the market tipped to ‘take a breather’ in 2016 this should put less pressure on purchase decision-making and give buyers increased confidence in the property process.”
He says consumers should buy affordable homes as interest rate hikes are likely‚ but these will have a marginal effect on buying trends.
“I believe the market will remain stable for bond approvals in 2016‚ however consumers will need to understand that the affordability of the home loan in 2016 will be different to 2015. A downgrade by rating agencies would make capital funding for the banks more expensive and impact the affordability guidelines for consumers‚” he says. “However‚ consumers that have kept their debt to income ratios low and have been working smartly with their money could benefit from negotiating a good price on a home as we move from a sellers’ market to a buyers’ market.”
With security a priority in South Africa demand for secure estate living will continue smaller residential and sectional title units will see better than average price growth‚ he says.
The top end of the South African property market above R10 million continues to be active‚ demonstrating continued resilience and buoyancy‚ he says.
Rademayer says metropolitan areas such as the CBDs of Sandton and Cape Town will continue to deliver positive growth in 2016.
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