The impact of the world economic down turn needs no introduction and of course it has had a knock on effect in the South African property market. Their is little doubt that the South African property market is currently a buyers market and there are some excellent deals to be done.
Growth prospects in the South African property market
Whilst lending approval has increased to nearer 50% of applications made (in 2009 it was a mere 29%), it has still to reach the highs of 2007 at 80%. This makes those with cash to spend king and places them in a very strong bargaining position.
Gone are the boom years of double digit growth in the 20’s and whilst people continue to buy and sell property there is little reason to expect any return to this level of growth in the near future. Industry experts see single digit growth over the next 2 -3 years before demand starts seeing house prices pushed further up. Pent up demand, more appetite for risk by lenders and South Africa’s continuing popularity as an international destination should then see growth rates increase.
More realistic expectations?
Estate agents are encouraging their clients to be more realistic in terms of pricing their properties and of course the South African property market will have some distressed sellers needing to climb out of their properties quickly. This creates oporunity for buyers as ‘for sale’ houses compete in this environment.
Lending appetite for the South African property market
Whilst lending approval has increased to nearer 50% of applications made (in 2009 it was a mere 29%), it has still to reach the highs of 2007 at 80%. This makes those with cash to spend king and places them in a very strong bargaining position.
Any further price drops?
With some sectors of the South African property market having already declined in value by some 15 – 20%, no further great losses are expected. On a postive note foreign buyers continue to invest into the South African property market and lenders appetite for risk is increasing.
Considering the price increases in the South African property market pre 2009 (some of the highest in the world), property prices have stood up quite well and demand for some of the lower to middle price housing has actually increased.
Is it a good time to buy?
There are a number of factors that make this a good time to buy for some people:
- It’s a great time to drive a hard bargain price wise
- Cash is king if you are that position
- Rental yields and demand are increasing
- There are some bargains in the South African property market
Beware of expecting instant gratification though. Most industry analysts agree that you should be buying (if for investment purposes) with an expectation of holding and not a quick turn around.
If its a family home or holiday retreat now may well be the ideal time to secure a bargain or keenly priced property.
Find out more about the South African property market
SAHomeBuyers is Cape Towns leading independent property buyers consultant. To find out more about the South African property market and discuss your needs with one of experts please please contact us by e-mail here or telephone + 27 (0) 83 2658800
