Forecasting 2024 : South African property market predictions revealed by industry
ASK THE EXPERTS
Forecasting 2024 : South African property market predictions revealed by industry
Berry Everitt CEO CHAS EVERITT INTERNATIONAL PROPERTY GROUP
What are your expectations and the trends you are expecting from the property market in 2024 with an election coming up ? What are the predictions for interest rates , inflation , rental sector , and the property market in general , is it time to buy or not ?
There will be two main keys to the anticipated revival of the South African real estate market next year , the first of which is a drop in the repo rate leading to lower mortgage rates .
While the South African Reserve Bank ( SARB ) followed the lead of the US Federal Reserve and kept its repo rate on hold at 8.25 % this week , an uptick in the inflation rate means there is still a possibility of another increase in January before home loan interest rates start to moderate , and activity in the real estate market starts to increase significantly .
A strong reason for such a rate increase would not only be to combat inflation but also to shift the differential between SA and US interest rates closer to the 3,5 % gap reached two years ago . A bigger gap makes SA more competitive in attracting foreign investment , strengthens the Rand and lowers inflation .
Many investors have already increased their appetite for emerging markets like SA because they believe that the US interest rate hiking cycle has ended . This bodes really well for a stronger Rand , greater economic growth and job creation , and for increasing consumer confidence .
Consumer price inflation in SA is expected to slow more this year and to settle at around 4,5 % in 2024 , which is the midpoint of the Reserve Bank ' s target range . This will bring further relief to many households that have been struggling to make ends meet and enable many more to qualify for home loans .
The possibility that the global economic picture could change rapidly if conflict deepens in the Ukraine and / or the Middle East . This could create food and fuel shortages that would once again raise inflation all over the world and limit consumer appetite for new real estate purchases either in their home countries or internationally .
The general election in SA that could also disrupt the market for several weeks and make some buyers more cautious as they wait for the outcome .
15 DEC 2023 / JAN 2024 Real Estate Investor Magazine