Real Estate Investor Magazine South Africa Real Estate Investor Magazine - July 2017 | Page 37

The fact is, as mortgage originator Ooba points out,
home buyers continue to face affordability constraints
in the current economic environment. Applications
with deposits continue to have a higher rate of approval
than 100% bond applications, in which instance banks
are currently extremely cautious.
Prior to the Cabinet reshuffle, FNB’s Agent Survey
re vealed that demand from first-time buyers had
strengthened in both the final quarter of 2016 and first
quarter of 2017 in line with tentative signs of economic
recovery. However, this has weakened as a result of the
dent to confidence from the reshuffle, the credit ratings
downgrade, and general political uncertainty.
Reporting an approval rate of 72.8% for April 2017,
Ooba observes that there is still strong competition
among home lenders for new business. This is despite
their being more cautious, with bank average decline
rates up 2.8% year on year.
Rising prices and increasing costs are shaping the
national residential property trends. Standard Bank
reports that Gauteng continues to attract the biggest
number of property transactions at 42% last year
(2016), followed by the Western Cape with 25%.
Reflecting this are also the demographic trends –
Gauteng is where the youngsters go, attracted by
greater job opportunities.
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FNB’s property strategist John Loos compares the two cities
thus: “Cape Town has become about lifestyle for the affluent…
Gauteng is more a functional working region, a place where
young professionals go to launch their careers.”
Meanwhile, both KwaZulu-Natal and the Eastern
Cape tick along steadily. The median house price in
KZN was up 6.2% year on year in April, just ahead
of inflation while the top end of the housing market
in this region is enjoying popularity with affluent
buyers. And according to Lightstone, the Eastern
Cape is experiencing house price inflation which has
rebounded throughout 2016 and into early 2017.
Overall, there is an air of some uncertainty hanging
over the residential market facing, as it does, economic
and financial instability and political upheaval. Yet in
spite of this, the market remains relatively calm, and
showing above inflation price growth in many key
areas, as demand overcomes supply.
For those who took the plunge – whether
freestanding home or apartment – say for example
three years ago, compound growth has been rewarding.
RESOURCES
Pam Golding Property group
JULY 2017 SA Real Estate Investor
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