PUBLISHED 22 JAN 2010
The year is starting with strong indications
that the economic emergency measures taken last year have by and large
been successful.
“And yet caution still prevails,” says Martin Schultheiss, CEO of
Harcourts Africa, “with economists divided on the sustainability of the
recovery and the prospects for economic growth in 2010.
“Which is of course good news for serious homebuyers and property
investors, because as long as there is this uncertainty, central banks
will tend to keep interest rates down and make it easier to afford new
purchases and easier to qualify for home loans.
“Once the world economy does return to higher growth rates, we are
likely to see the banks start raising rates again to curb inflation,
which will of course put limits on the buying opportunities that are
currently evident – and limit the chance for consumers to benefit from
the expected 25% to 30% increase in property values over the next three
years.”
As for the property market itself, Schultheiss foresees the following in the year ahead:
* Interest rates are currently at a 28-year low and unlikely to drop
much further. In fact they will probably start to rise again at the end
of the year. The next few months will thus be the best time for
homebuyers to obtain loans, and could be a good time for existing
borrowers to fix their rates.
* Affordability of property should increase steadily this year as
consumers continue to pay down debt and salaries start to increase in
line with greater economic growth.
* Population growth, economic empowerment and increasing prosperity
will also stimulate demand among owner-buyers in established markets.
However, stringent home loan qualification criteria will ensure that
the rental market stays active and strong, and this will encourage
investment.
* New residential property markets will continue to be opened up by
mining and industrial ventures, tourism and infrastructural
development, and activity will be less concentrated in the main
metropoles. Some speculation is likely to be evident in these new
markets.
* Security and personal safety will remain major purchase
considerations and an increasing percentage of buyers are likely to
choose homes in gated villages and estates. This will emphasise the
importance of good legislation to regulate sectional title and / or
community living and resolve disputes quickly and cheaply.
* Both buyers and sellers will increasingly expect and demand
outstanding service from agents, and the real estate industry will have
to invest heavily in more and better training as well as more
user-friendly websites.
*At the same time, transformation will be top of mind within the
industry and it will become more representative, with an increasing
number of black agents operating in the mainstream and not just in the
former townships.
Source: Property Trader
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