From the Desk of the MD - February 2018
Category From the Desk of the MD
I'm happy to say that the real estate market has got off to a flying start this year - with some of our offices even achieving record sales in January - and that we are confidently looking forward to a great 2018.
We could already see a major shift in consumer sentiment after the positive outcome of the ANC leadership conference in December, and the warm reception given to the SA delegation during the recent World Economic Forum gathering in Davos has further boosted confidence in SA's economy going forward.
The country is apparently regaining the interest of large-scale foreign investors despite the recent rating agency downgrades, and that may well mitigate the tax increases that are on the cards to help reduce the national budget deficit.
Meanwhile, the stronger rand and stable interest rates have also helped to raise consumer spirits, and the past few weeks have seen particularly strong home sales in the economic heartland of Gauteng, where business and employment are expected to pick up first as the economy starts to recover.
However, demand has also risen in many other parts of the country, with buyers and investors who had been sitting on the sidelines for several months coming back into the market in pursuit of the excellent value currently on offer. And if this continues, we expect the rate of home price growth to start increasing again this year.
This will probably be a slow process, but it will nevertheless mean that those who delay their purchases will have to apply for bigger home loans by this time next year and will need bigger salaries to qualify for those loans and to afford the monthly repayments.
Consequently, our advice to anyone who needs a new home now or is building up a rental property portfolio is to make a move soon, while they still have a good choice of properties for sale and while sellers are still willing to negotiate. The picture is likely to be quite different in 12 months' time...
Author: Gerhard Kotze
