Market favours buyers PDF Print E-mail
News - Artikels
Tuesday, 18 March 2008 02:00

The world economy is moving towards possible recession and in South Africa real estate industry analysts are issuing warnings to adopt a cautious approach to the market.

These conditions will, however, favour buyers and will mean that they will find good value in 2008 by using the services of leading real estate professionals. On the back of the ongoing sub-prime mortgage crisis in the United States and the global average stock exchange decline of five percent in value, South African consumers are losing confidence in the local economy. According to a leading Southern African realtor, speculations of a global economic slow-down, even the possibility of a recession, has driven consumer confidence to a state of caution and a ‘wait-and-see’ approach to the property market.

In the last months, the median house price index issued by a leading South African bank, showed that price growth in residential property had come to a grinding halt at the end of 2007. Additionally, Eskom’s power supply woes will lead to a decline in new property developments. While this may lead to developers seeking ecofriendly ways to build homes, it will not do consumer confidence levels any favours.

This factor, plus dollar-rand exchange rate pressure and the substantial trade deficit in the South African economy, will likely prevent Reserve Bank governor Tito Mboweni from issuing another interest rate hike in the near future.

It seems that this year will become an even stronger buyers’ market than anticipated in 2007. We will continue to see property prices dip on average between 10 and 15% below the original asking price for properties listed towards the end of 2007. Consumers who want to sell their property in a hurry will be well advised to list it at 10% below what they wanted to achieve in December last year.

The good news is that it is a great time for first-time home-buyers to enter the market; the unique balance of affordability and strong value makes this venture into real estate a brilliant proposition.

 

© 2019 Die/The Bronberger