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Rental market making itself felt

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Johannesburg - With a shortage of stock in the rental property market making itself felt in strong rental returns, investment in residential property to let is an attractive option," according to High Street Auctions Joint managing director, Lance Chalwin-Milton.

In 2013, the residential property market felt the effect of the increasing cost of living resulting from electricity hikes, exchange rate volatility and increased personal debt due to unsecured lending.

Added to that scenario the forthcoming e-tolling system in Gauteng has put some weighty pressure on the residential market.

Jacques du Toit, Absa Home Loans Property Analyst, says nominal year-on-year (y/y) house price growth improved in 2013.

According to du Toit, the first five months of 2013 saw levels of residential building activity rising by more than 10% compared with a year ago.

Currently, the residential market appears to be entering a more positive cycle with a greater demand for small to middle sized homes by the middle class.

Statistics released by BetterBond Home Loans indicate that the number of home loan applications received has increased by 5.06% in the 12 months to end-October, compared with the previous 12 months.

Recent figures from national property analysts have indicated that a revival is taking place in middle-range properties in the South African commercial sector.

The year-on-year upturn is generally estimated at around 25%. The retail sector also experienced growth towards the end of 2013 with a number of new malls and mega malls built.

“The property trends overall are moving in a positive direction despite a challenging economic environment in 2013,” said Chalwin-Milton.

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