Ian Fife

The global collapse of property prices has passed us by. There have been small falls in prices of houses and secondary commercial property, but SA property’s staying power is no longer in question.

Nedbank Securities analyst Evan Robins and Growthpoint director Estienne de Klerk are both more positive than they were some months ago because rentals and incomes have continued to grow and prices have held up.

There have been fewer large business failures, and rocketing building costs halted new developments before the downturn started last year.

A deeper reason is despite the decades long underdevelopment of property — from which the sector still has to recover — rent and prices in SA remain among the lowest in the world. This recovery will be back on track as soon as growth returns to the SA economy, which is hard to predict at this stage.

The residential market has been resilient too. The latest Lightstone resale price index shows a 1,3% annual fall.

Pam Golding Properties executive director Ronald Ennik says prices will rise below 10%/year over the next five years because banks will continue to undervalue, demand higher deposits and grant fewer bonds. Samuel Seeff reckons prices will move into double digits in three years as banks and buyers become more confident.

Source: Financial Mail