PUBLISHED 22 JAN 2010
With sales volumes dramatically up over the
past three months, the residential property market is set for a sure
and steady recovery in 2010.
That’s the word from Lew Geffen, chairman of Sotheby’s International
Realty in SA, who says: “The whole market has really come alive again
since October, and nationally, the number of sales made in the last
quarter was more than 45 percent up year-on-year, with some areas
showing even bigger increases, and our turnover was up 60 percent.
“Big ticket sales, especially, are back with a bang, and stock is being
taken up fast, even in the most expensive suburbs of Johannesburg and
along Cape Town’s Atlantic Seaboard. Several really upmarket homes that
had been on the market for around 18 months have recently been sold.”
In short, he says, the market is rapidly normalising towards a supply
and demand balance, and house prices can be expected to return to the
traditional average growth rate of around 9% this year.
“It’s as though the market is trying to make up for lost time now, and
lower interest rates and greater affordability are definitely playing a
strong role in this. But there are also other influences in play – not
least the fact that the banks are definitely committed again to the
home loans market, and competing strongly for market share even as they
maintain caution in determining who they should lend to. This means
that those borrowers who do have good credit records and sufficient
disposable income can once again shop around for the best mortgage
options.
“In addition, there are many investors out there who are determined not
to be left out of the next property upswing and have an appetite to buy
quickly at current prices because they realize the market has already
turned.”
However, says Geffen, in this scenario one can also expect new
development to start again, and bring new stock on to the market that
will keep prices very competitive. “Certainly, home sellers and
investors should not be expecting the 20 and 30 percent annual price
growth that we saw during the most recent property boom, which is
actually unhealthy for the market.
“What they should be able to expect, however, is steady growth that
beats inflation, and we believe 2010 will put the market firmly back on
its feet ahead of a long period of such growth.”
Source: Property Trader
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