Although property valuations are soaring, property experts say the market in South Africa is more positive than before.
According to a household and property sector strategist at FNB, John Loosof, “from an average house price growth rate of 3.7% last year, we project the 2018 average to shift a little higher to nearer to 5%”.
He added: “This is not a major improvement, but it stems from expectations of marginal economic growth improvement in 2018, from an estimated 0.7% last year to 1.2%, and one lone interest rate hike only late in 2018 not expected to have a significant dampening effect.”
Lanice Steward, president of the Institute of Estate Agents SA, said one reason for the negative impact of the market could be because some home owners fail to meet their financial obligations, which results in a “downward pressure” on prices.
She said despite this pressure, there will hopefully be a “positive sentiment in the market with [the] appointment of [Cyril] Ramaphosa as president [to] counter any negativity in the market.”
She advised that “the reality is that buyers will have to look at a slightly lower price range when buying from an affordability factor. It will not necessarily impact on activity as people continue to get married, have babies, get divorced and downscale.”
The Pam Golding Properties research department in the Western Cape and KwaZulu-Natal continues to see growth in the property market in South Africa.
Steward says while the property market is looking positive, coastal property in is generally “outperforming” inland properties.