Promising signs for an uptick in activity in SA’s housing market

Posted On Friday, 24 May 2019 12:21 Published by
Rate this item
(0 votes)

As anticipated, the MPC kept the repo rate steady, taking a conservative approach against the backdrop of rising fuel prices, and with a wary eye on CPI inflation, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

-ANDREW_GOLDING-

“However, a reduction in the repo rate, on the back of the market-friendly election outcome, would have created stimulus for the economy and property market, as well as a confidence boost for consumers in general, especially home owners and buyers with outstanding mortgages and hefty bond repayments.

“Having said that, and based on the Pam Golding Residential Property Index April statistics, it is encouraging to see that the national housing market already appears to be starting to see promising signs which augur well for an uptick in activity now that the dust has settled on the election.”

Dr Golding says good news is that the slowdown in national house prices appears to be bottoming out, with national house price inflation steady at 3.7% in both March and April. “We believe the stabilisation and potential for a turnaround in the national market is being driven by a combination of a gradual strengthening in Gauteng and a tentative rebound in the Western Cape region, which had experienced a price correction. Despite this, the Western Cape remains the top performing major region overall, with the strongest regional price growth (6.75%) across all price bands. Interestingly, the East Rand continues to enjoy a modest rebound and is currently the top performing Gauteng market.

“Given that the above statistics are for the pre-election period, this is a positive indicator which makes the case for a turnaround even stronger - as after each of the five general elections held since 1994, the SA housing market has experienced a rebound of varying degrees during the subsequent 12 months. So, if history does indeed repeat itself, and given that much of the uncertainty which has been hanging over the market is finally removed, activity and price growth are likely to recover – more noticeably after the seasonally quiet winter months - and the residential market should soon begin to strengthen on a broader scale.

“Notably, and as reported by FNB’s May Property Barometer, the uptake of homes by first-time buyers continues to gather momentum, now an estimated 22.7% in Q1 2019 compared with 17.6% in Q1 2018. With affordability and value key factors among the swelling ranks of first-time buyers in particular, promising news is that first-time buyers are returning to the market in Cape Town, prompted by the recent price adjustments, as well as the compelling desire to gain a foothold in the market, with the latter trend also evident in KZN.

Last modified on Friday, 24 May 2019 12:31

Most Popular

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
 MOA PNP  1
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
 BRONWNY CORBETT
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

4AX listed Heartwood Properties reveals positive financial results

Sep 23, 2019
 JOHN WHALL
Commercial property development company, Heartwood Properties , has revealed a 30%…

Reserve Bank keeps repo rate unchanged

Sep 23, 2019
 LESETJA KGANYAGO
 South African Reserve Bank Governor Lesetja Kganyago on Thursday said this is in line…

Please publish modules in offcanvas position.