TRENDS
Most notably, monthly volumes have gathered
momentum month-on-month since mid-last year at
prices are now actually only worth about 19% more
than in 1983.
“While timing the market
is difficult, now is
undoubtedly a good time
to invest in property.”
Cu r rent d at a f rom b ot h F N B a nd A BSA
p oi nt s to c u r r ent hou s e pr ic e i n f l at ion of
a rou nd 8 % i n nom i n a l ter ms (2 . 33% a f ter
adjustment for inf lation) a lthough there a re
high demand a reas where the average house
price growth certainly tops this. Prices though
have f irmed and if the pent up demand persists,
we could see the gradual upward trend in prices
gather momentum, but it is unlikely to reach
unsustainable levels any time soon.
the rate of about 2 000 transactions on average when
compared to the 2012 period.
If that holds, we could end this year at about
10% up in terms of sales volumes and a bit closer
to 27 000 per month. Although this would still
fall somewhat short of a monthly average of 30 000
needed to put the market into real upward gear,
the upwards trajectory is highly encouraging.
Responding to a recent press report in Forbes
that has elicited debate around whether the South
African economy and property market is a bubble
waiting to burst, this is highly speculative insofar
as property is concerned.
Much of the oversupply of property has cleared
out of the market and despite the pent up demand,
there is simply no wholesale price hikes.
There are still too many forces, not least of
which the high household debt and constrained
mortgage lending levels that still has a hold on
the market preventing a massive jump in sales
volumes needed as a precursor to industry-wide
price hikes, he continues.
W h i le muc h ha s been made about S out h
Africa’s house price growth being at unsustainable
levels in the early 2000s, an analysis done by
housepricesouthafrica.com(based on Absa data)
dispels this. It shows that in real terms, house
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Residential Handbook 2014
While timing the market is diff icult, now is
undoubtedly a good time to invest in property.
The shortening days on the market (now around
15 weeks nationally although it is much less in
the high demand areas), buoyant demand and
shrinking property inventory also points to this
period as a good phase for sellers.
Most of those that needed to sell have now
sold and this paves the way for new listings and
product to come into the market.
We have certainly seen an emergence from
the depressed sales levels of three to f ive years
ago and are now in a stable phase poised for a
rebound. We will need to watch the economy and
interest rates in particular carefully though.
Hopef u l ly, once t he dust set t les a f ter t he
election some of the UK , European and US
e c onom ic re c ov er y c a n s pi l l ov er i nto t he
emerging markets and provide a kick-start to our
domestic economy. For now though, the housing
market is on a firm foundation and we expect it to
continue its gains throughout this year.
RESOURCES
Samuel Seeff, Seeff Properties
www.reimag.co.za