Real Estate Investor Magazine South Africa February 2015 | Page 23

REI RESIDENTIAL
REI Residential

Just Property Group wins
international quality award
The Just Property Group won a gold Geneva International
Star for Quality. The award is part of the annual program of
BID Awards. John Roberts, Just Property Group CEO, second
from left, picks up the award in Geneva.

Property market outlook is ‘surprisingly positive’

T

he property market has fared relatively well in 2014 against the backdrop of
an estimated economic growth rate of only 1.4%. “There is pent-up demand
for residential property after many years of difficult economic conditions. As
such, the outlook for the property market in 2015 is surprisingly positive,” says
Rhys Dyer, CEO of bond orginator, ooba.
“We expect to see a stable market for bond approvals in 2015, with some
potential for small deterioration as interest rates continue to rise and thus impact
the affordability of consumers to purchase new homes,” explains Dyer.
Now is a good time for first-time home owners to buy property, particularly for
the aspiring black middle class.
Smaller sectional-title homes close to city centres will show greater growth in
2015, as a result of affordability, lower maintenance and better security. Higher
rentals can be demanded.
Investor interest in the market remains encouraging. The buy-to-let market,
which has significantly under-performed over the past few years, may show an
increase in activity in 2015, to satisfy demand for housing. With the Rand under
pressure, South Africa remains a relatively cheap property destination for foreign
buyers, and we may see more activity in this sector.
Adrian Goslett
CEO
RE/MAX South Africa
Although financial requirements have remained stringent
to some degree and emphasis is placed heavily on
affordability levels, banks have increased their appetite for
risk and subsequently bond approval ratios have increased.
More and more potential buyers have also started to
prepare for homeownership by saving up for deposits and
reducing their debt levels.

Mike Van Alphen
National Manager of Rawson Finance
Rawson Property Group
There has been a phenomenal increase in rentals, which in
urban areas have often been above 10% year-on-year and
in some cases have even begun to approach 20%. Tenants
on R8, 000 - R9, 000 monthly rentals, are saying that the
same outlay can provide them with a R800, 000 - R900,
000 bond provided they can find a deposit of R80, 000.
www.reimag.co.za

Expert Q&A

What lies
ahead in
2015?
Myles Wakefield
CEO
Wakefields
Real Estate
Q How do you describe the property
market in Kwa-Zulu Natal (KZN) for
2015?

Stock levels are low, the bands of those stock
levels are increasing – it used to be a shortage in
the lower to middle segments of the market, now
it’s creeping up to include higher prices, most
probably as a result of low interest rates. It is
playing itself out as a visible return of confidence
to the marketplace. The banks are lending more
money, prices are rising again, more in the last
two years than in the last five, on the back of low
stock levels.
Q What is your advice for property
investors?

Do not focus on the capital growth, but rather on
the achievable rental. Capital growth is always
the wild card. Property is a long-term investment,
no matter what happens to the market in the
interim, that property will increase in value in
a decade. A great investment is one where you
are charging your tenant R100 a month right
now, and next year, instead of it going up by
6%, which is inflation, you are able to get 7% or
8%. Your rental income must be higher than your
bond repayment.
Q Which areas are in demand, and
are there unexpected areas showing
growth?

Areas close to amenities, which people need, will
be most in demand. People seek out homes close
to their daily commutes. If stock levels are low in
an area that is an area where demand is high.
And vice versa. Low stock levels, high demand,
means prices will escalate more there.

February 2015 SA Real Estate Investor

23