Real Estate Investor Magazine South Africa February/ March 2020 | Page 17

TRENDING
remain stagnant and suffocated if there are not any strategies
to exempt the sector and market from the prevalent economic
scares.
“Until there is greater clarity on the prospects of a recovery in
the local economy, the housing market, which remains resilient,
that is currently weighted in favour of buyers, is unlikely to
enter another fully-fledged recovery. The recent recurrence
of load shedding, ongoing socio-political challenges and a
volatile global environment have created further headwinds,”
He said.
According to Dr Golding, Professor Francois Viruly (UCT),
recently pointed out that it is not the depth of the slowdown
that is hurting the property market, but rather the length of
time the economy has remained sluggish. Continued pressure
on consumer household finances, and on property developers,
is creating a robust headwind for the market.
Sales volumes in 2019
For a successful rehabilitation of any market prior to a new
year, it is of paramount importance that attention is paid to the
previous year’s record. It is important that inspiration is drawn
from how things have been going previously and what went
well or wrong. This helps in improving the property market’s
“Although total unit sales slumped in 2019, possibly due
to load shedding and pre-election jitters, they have since
rebounded strongly. Further good news is that conditions in
the national property market are, nonetheless, beginning to
stabilise. From a low in the first quarter of 2019, unit sales have
since risen steadily from 63 887 in Q1 to 73 656 in Q2 to 77 086
in Q3. And unit sales during the first half of 2019 remain just
over 11% below year-earlier levels, Q3 2019 sales are 2% above
year earlier levels,” Dr Golding said.
“The increase in units sold is seen partially as a result of
growing competition between financial institutions for market
share, resulting in the easing of lending conditions with loans
– including 100% loans – being extended at a pace last seen 12
years ago, and generally lower deposits required.
One of the signs of banks’ increased appetite for bank
lending is the fact that mortgage advances are growing at a
faster pace than house prices suggesting that there are more
home loans than before. This appetite for lending, combined
with relatively low interest rates plus inflation which has
surprised on the downside in recent months, reinforces the
likelihood that conditions could stabilise. However, for a more
sustained recovery in the market, it will require an improvement
in economic growth and employment prospects.
“People are increasingly
looking to add energy and
water saving features to their
homes to reduce monthly
utilities costs and enhance
value.”
Even though the real estate and property sector is largely
interested in the growth and the ability for investors and
property buyers to make great financial returns on investments,
it is pivotal that players in the sector note the impact this
industry has on the growth of the country and the influence
it has on the economic stability of South Africa. As vast and
expensive as it is, it is not the most difficult sector to penetrate.
In the real estate and property sector there is everything that
one needs when starting out in any foreign sector. It provides
financial assistance through funding models that allow
investors the space to grow their avenues. It consists of data
analysis groups that through viewing content of investors, can
understand the dynamics of the sector, amongst other things.
In order to maintain the standard of the sector that is
recognised as one of the most developing sectors in the
country, real estate investors, property buyers and sellers need
to be extra careful of overlooking the trends that are predicted
to shape the property sector for 2020.
It’s important for residential property investors, buyers and
sellers, as well as developers as it gives an idea of how much
effort investors should give to their investments and business
avenues.
SOURCES Pam Golding, Lightstone
SA Real Estate Investor Magazine FEBRUARY/MARCH 2020
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