PROPERTY NEWS - The residential property market has had its ups and downs during 2016 as the economy stagnates, the Reserve Bank started hiking interest rates again and consumers struggle with household debt-to-income.
What's in store for 2017; slowing property price growth - with a few notable exceptions - an increase in demand for smaller properties, specifically sectional title, and a tightening of the belt when it comes to household savings.
Slowing property price growth, with a few exceptions
While certain areas – mainly in large urban centres like Cape Town and Johannesburg – have done well during 2016, the overall consensus is that property price growth in general has gradually, but steadily, slowed down over the past seven months.
While certain areas – mainly in large urban centres like Cape Town and Johannesburg – have done well during 2016, the overall consensus is that property price growth in general has gradually, but steadily, slowed down over the past seven months.
According to the November FNB House Price Index, this general slowing is due to lagging impact of a multi-year weakening in economic growth and possibly the impact of the interest rate hiking cycle, with the report indicating that consumers are concerned about future economic performance.
Regardless of what the economy is doing people still need a place to live, so demand in the major metropolises will continue, mostly, unabated – particularly in the R400,000 to R1.2m price range. The higher end of the market has struggled more, except in certain hotspots.
A look at property hotspots around the country
The Western Cape has seen incredible property price growth – specifically on Cape Town’s Atlantic Seaboard (which we believe is being driven by local migration from other provinces and by foreign buyers to some degree) though we’re seeing strong growth in Stellenbosch and Somerset West as well (with the increasing number of gated estates and retirement villages driving the growth here).
Regardless of what the economy is doing people still need a place to live, so demand in the major metropolises will continue, mostly, unabated – particularly in the R400,000 to R1.2m price range. The higher end of the market has struggled more, except in certain hotspots.
A look at property hotspots around the country
The Western Cape has seen incredible property price growth – specifically on Cape Town’s Atlantic Seaboard (which we believe is being driven by local migration from other provinces and by foreign buyers to some degree) though we’re seeing strong growth in Stellenbosch and Somerset West as well (with the increasing number of gated estates and retirement villages driving the growth here).
Looking at other parts of the country, we find good growth in Midrand and Vanderbjilpark (as more and more businesses move to these areas) in Gauteng and Durban North, Umhlanga Rocks and Ballito Bay in KwaZulu-Natal.
Sectional title properties increasingly in demand
Due mainly to the increased security offered in sectional title developments, these properties are increasingly in demand – from the lowest price bracket right through to high-end estates.
Sectional title properties increasingly in demand
Due mainly to the increased security offered in sectional title developments, these properties are increasingly in demand – from the lowest price bracket right through to high-end estates.
Another selling point is the decreased maintenance required. The new Sectional Title Schemes Management Act (STSMA) and Community Services Ombuds Service Act (CSOSA) will drive much needed reform in terms of the financial and physical management of sectional title schemes which will make these properties even more attractive going forward.
