2018 PROPERTY MARKET UPDATE
Category Residential Property News
"From where I stand in July 2018, compared to the same time last year, we're literally worlds apart. The confidence felt by South Africans is reflected in every aspect of life, and that includes property. At Wakefields, our figures are considerably higher this first half year than last, and the traditional signs of a livelier market - namely show house figures and enquiries - are all there.
"In the last quarter of 2017 into early 2018, South Africans were riding on the euphoric crest of the new leadership wave. The first few months of 2018 were more buoyant than we'd seen in years, and it was clear that South Africans were confident that the light at the end of the tunnel had been switched on. As we moved further into 2018, it was inevitable that reality would set in and the property market would settle, which it's done.
"Policy uncertainty is the biggest obstacle to growth or progress, and in the new leadership's clean-up and rebooting process, a lack of clarity has created some concern. But on the flipside, many of the grave economic concerns of last year - like SA's standing with the ratings agencies - have eased. Realistically, it was unlikely that the leadership honeymoon would last indefinitely, and their mammoth task of turning this troubled ship around would - and will - take more time than any of us would like. We'd like to fast forward to real job creation and economic growth, but meantime, South Africans are, as always, resilient, and getting on with life. That includes finding, renting, buying and selling homes.
"For me, the positives far outweigh the negatives, and that sense of confidence is reflected in the property landscape across the province. The negative effects of VAT and utility increases are to a certain extent offset by the steadiness of the home loan rate and the higher conversion rate reported by the banks. South Africans are raising bonds and buying homes at a rate which is substantially better than last year, and all things being equal, we expect this confidence in the country to continue into the second half of the year.
"There have been other tentatively positive signs too. The lower end of the market continues to be the most active, which implies South Africans are entering the market for the first time. That's immensely positive for the country. Equally, the top end of the market - and the higher price bands in all suburbs - has shown some improvement, and that too, is positive.
"Worth noting, is the spatial impact which the rising fuel price is having on the SA property landscape. Globally, people choose to live close to work and schools, because of valuable time wasted ‘on the road’. That’s a growing factor here, but a bigger player is becoming the steep increase in fuel costs.
"We need to keep a little perspective. Look at the bigger picture. Things are way better than last year, and that injection of confidence is reflected in property transactions. It's certainly reflected in the number of new residential developments. If the property or product is the right one, priced correctly, the buying market is turning up in numbers, irrespective of the politics and economics around them. Over 400 people and R45m transacted solely on the launch day at Greenhaven Estate in Padfield Park. A perfect example of the right boxes ticked.
"Bottom line, despite the financial pressures and policy concerns under which South Africans are labouring, property is performing way better in 2018 than 2017. A stable property market is, as always, reflective of the country's mood about today and tomorrow."
Author: Anne Schauffer
