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Johannesburg - There is ample evidence that properties in the so-called affordable price range are in high demand, Property24 managing director Richard Gahagan said on Thursday.
He was referring to an article in Thursday's Business Report saying that sellers should brace themselves for a 40 percent drop in prices.
This, he said, may only be one side of the story.
"We need to be very careful about making sweeping statements," Gahagan said.
"It's all very well to say house prices have dropped, but this only applies to certain segments of the market. There is ample evidence that properties in the so-called affordable price range are in high demand."
Gahagan said buyers were available and although the banks were now more reluctant to approve 100% bonds, there were still sales taking place.
"It also seems to be very easy for the mostly white real estate industry to make the mistake of discounting the township markets," Gahagan said.
"FNB's Property Barometer for the fourth quarter of 2007 showed that township markets were still racing ahead, some by as much as 50%."
According to FNB's property strategist John Loos, the massive price gains in former township areas were a reflection of a shortage of stock in the affordable housing market.
In Gauteng, these areas included Tsakane (56%), Mamelodi (48%), Soshanguve (44%), Kathlehong (41%) and Vosloorus (40%).
Khayelitsha in Cape Town recorded a strong 57% price growth in the fourth quarter of 2007 while the Durban townships of Kwa-Mashu and Umlazi saw house prices increase by 55% and 48% respectively.
Gahagan said he was worried about creating panic in the market.
"People are desperate for information at present," he said, "and often comments from property players are sensationalised by the media as a cheap publicity shot, because bad news sells."
A new homeowner with an R800 000 property, struggling to keep up with inflation and rate hikes, could be led to believe his property was now worth 15 to 20% less than he paid for it.
"This could lead to panic selling, which is great for bargain buyers but not really in the interests of the economy in general," Gahagan said.
- Sapa