PROPERTY NEWS - "South Africa's residential market is in for an interesting time in 2019, but our predictions for the year are all positive, and we believe home buyers and investors who take the plunge and buy early will be rewarded well."
That is the confident word from Berry Everitt, CEO of the Chas Everitt International property group, who says buyers and investors should not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains.
"With the US/China trade war and the ongoing Brexit saga dominating the news, many investors around the world are just sitting on the sidelines at the moment and waiting to see how things turn out. But SA is actually benefiting from the current situation, with the weaker pound and dollar being good for the rand, and oil prices being at very low levels.
"This helps to contain inflation, lowers the likelihood of another interest rate hike at the start of the year, and is clearly a positive for economic growth and job creation, with GDP having grown 2,2% in the third quarter of last year to take the country out of recession."
The shaky world situation is also expected to give a further boost to local home demand and sales, he says. "But even as things are, SA banks are keen to lend to home buyers, household debt is at a 10-year low and recent statistics from Lightstone and BetterBond show that SA is already quietly gaining about 77 000 new home owners a year.
"Urbanisation is also happening at a rapid rate and developers are anticipating a concomitant increase in the demand for rental homes by planning more than R40bn of new private sector housing over the next two years, most of which are sectional title flats and townhouses (StatsSA)."
Taking a broader view, Everitt says the softer stance the US Federal Reserve is now taking on interest rates is also good news for SA as it means international investors may be more willing to invest here without the Reserve Bank raising rates.
"And the proof of SA's attractiveness as an emerging market is in the fact it has taken President Ramaphosa and his team just six months to reach the halfway mark on a what was supposed to be a five-year quest to attract $100bn worth of foreign and corporate investment."
However, says Everitt, much of this positive outlook is currently being blurred by other problems that are the legacy of State capture, including bankrupt or nearly-bankrupt state-owned enterprises such as the SABC, SAA and Eskom, low GDP growth, high unemployment, crime and corruption.
"We are anticipating a surge in prices following the election, which will mean that buyers have to earn more to afford the homes they want, take out bigger bonds and pay higher monthly instalments.
"In addition, they will have missed out on the substantial value growth that they would have gained by buying now, while prices are still relatively suppressed," Everitt says.
"Those who do buy now, on the other hand, will gain that post-election jump in the value of their property, and enjoy the benefits of a smaller monthly bond repayment. In short, they stand to derive the maximum possible advantage out of the strong market recovery that we foresee taking place over the next four years."
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