Real Estate Investor Magazine South Africa REIM February 2018 | Page 32

OUTLOOK
What’s ahead
TA
for residential property in 2018?
Buyers in the sweet spot
HERSCHEL JAWITZ
CEO, Jawitz Properties
T
he gradual slowdown in the rate
of growth in property prices
across the country has left home
owners, buyers and investors wondering
what could be in store for residential
property in 2018. Unless we see a mas-
sive positive shift in consumer and busi-
ness confidence, 2018 will be much of
the same. This slowdown extends to the
Western Cape – a niche market in itself
- where property price growth has fallen
below 10% for the first time in at least
three years. Times are tough, but yet
almost ironically, there has never been
a better time to buy property than now.
In Gauteng and Kwa-Zulu Natal,
the slowdown in property price growth
has reversed with a marginal uptick in
prices in October and November possi-
bly signalling that prices have bottomed
out. However, this needs to be seen in
the context of property prices growing
by 3.5 to 5% in nominal terms, which is
below the current rate of inflation. Oth-
er than in the Western Cape and more
specifically Cape Town, property prices
will have declined in real terms by the
end of 2017.
Downsizing from large homes that
are expensive to maintain and run (and
because of security) is a definite trend in
cities like Johannesburg. Over time, this
trend will put pressure on property pric-
es for these sorts of homes.
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With a slow economy, low consumer
confidence and price sensitive consum-
ers, the key driver for buyers is value - a
combination of position, price and size -
at virtually every price level. We are even
seeing this at the top end of the market.
In most regions across the country, sup-
ply continues to exceed demand with
cautious buyers spoilt for choice. Buyers
are looking for the best deal they can
get showing no fear of loss or urgency if
they cannot get the property they want
where they see value. This includes a
reluctance to get involved in significant
improvements to a property, believing
they can pay the same value driven price