COVER STORY
In the last few years , the global economy has changed significantly , which has impacted the property sector in many ways . Many factors influence the current state of property investment , from rising interest rates to evolving demographics and technological advancements .
We explore 5 of the most important trends and analyses to consider if you want to make informed decisions and stay ahead of the property investment game .
Gross Domestic Product ( GDP )
According to the International Monetary Fund ( IMF ), global growth is projected to slow from an estimated 3.2 % in 2022 to 2.7 % in 2023 .
The real GDP growth in South Africa ( SA ) was 2.6 % in 2022 , and the IMF projects it to be 0.1 % and 1.5 % in 2023 and 2024 , respectively .
Inflation
According to Trading Economics , the annual consumer price inflation in the US declined to 4.9 % in April of 2023 from 6.5 % in
December 2022 .
Statistics SA shows that the annual consumer price inflation in SA was 7,1 % in March 2023 compared to 7.0 % in February 2023 .
The current prime interest rate in SA is 11.25 %. Many economists believe that interest rates are nearing the top before they will begin to stabilise .
Property Price Growth
It ’ s not all doom and gloom for property investors ! There are so many opportunities to take advantage of . According to Lightstone ’ s Residential Property Index ( March 2023 ), property prices ’ current annual capital growth is 2.6 %, with Limpopo performing the best and Mpumulanga in second place . Annual property inflation in the Low-Value segment was again much higher than in other segments .
Paul-Roux De Kock , Chief Analytics Officer at Lightstone , says three scenarios suggested that House Price Inflation ( HPI ) in SA for 2023 would likely come in between 0.9 % ( low ) to 2.3 % ( mid ) or 3.7 % ( high ).
35 APRIL / MAY 2023 SA Real Estate Investor Magazine