Where am I? Fin24.com > Economy

'House price recovery ahead'

Apr 17 2008 21:21 Elma Kloppers

Johannesburg - The residential market will remain tough for the next eighteen months, but should pick up by the end of next year when interest rates will probably start to come down.

Despite various unusual factors that together have contributed to the extremely difficult market circumstances, Pam Golding Properties (PGP) chief executive Andrew Golding believes the local property market will survive the storm.

"People forget, but in 1998 the house market was in a similar position when interest rates reached 25%." A seven-year boom market followed shortly afterwards.

He said the property market was largely driven by sentiment, which would be a key factor in the future welfare of the industry.

Sentiment is taking a knock now because of worldwide fears of a recession amid the sub-prime crisis in the US and the sky-high international oil price.

On the national front it was being influenced by rising interest rates, political uncertainty and the Eskom crisis.

The Credit Act had also had a meaningful impact on banks' capacity to lend money, which hurt the property market.

Consequently, sales volumes were between 20% and 30% lower.

Even though buyers were now in a position to negotiate a more realistic price with sellers, he did not foresee "massive sales".

Some buyers will pay R60m

But while the broader market was affected, he said that houses of more than R15m were in an unusual position and were surprising with continued price growth.

"To pay R40 000/m² for a new house Cape Town and Gauteng is not strange anymore," he said.

Buyers in this category are prepared to pay R60m for a property because they are relatively unaffected by rising interest rates.

- Beeld

Share this page

Add your comment

(No bad language or hate speech, please)

Comments Order

Jaded
Apr 18 2008 22:22 Report this comment

Bye-bye! SA does not need investors like you who run at every opportunity! As a South African born and bred here I am trying VERY HARD to keep up my spirits and optimism. It hard enough without getting these type of 'investment threats' - so in good old Afrikaans - Vat jou goed en trek! Remember WHY the pastures on the other side always look greener...more 'manure' my man!

Joe
Apr 18 2008 12:33 Report this comment

When will the ANC realise that their policies are less than perfect ? How amny Eskom's do we need to have before that re-acces their strategies. Chasing your most qualified people out of the country is like giving away mineral wealth. The tax base is being depleted, making it more difficult to alleviate poverty, create development and investment and create job opportunities. All the negative repercussions are going to have a negative knock-on effect on the property market. If Mbeki had not bought the SABC, they could put these quastions to the ANC, but now that the SABC has become the personal mouthpiece of the ANC, democracy and free press has been compromised, making government less effective in the long run because they are never put on the spot and never have to answer their failings. The SABC reporters are card carrying ANC comrades and never allowed to criticise the 'party'..

johnny
Apr 18 2008 12:02 Report this comment

No facts, no logic, no science, no credibility....

LK
Apr 18 2008 11:44 Report this comment

All Andrew Golding has done to get his 18 month guesstimate is to work out the number of months from now until 2010 (approximately). 2010 and the hyped up promises of the world cup seem to be people's last hope for the economy. I hope it's true but it does cast a shadow of sceptism onto how he arrived at the 18 month figure. If it's as simplistic as tying in house price hopes to 2010, I'm afraid I can't be as pleased by this article as I would have been were it written by someone more objective.

LK
Apr 18 2008 11:35 Report this comment

Mandy you sound like a socialist (or just a bit daft to be honest) If houses were only to be lived in and enjoyed, then everyone would just rent. You can afford a much more "enjoyable" house renting than buying a less luxurious house and paying off a bond. The reason people buy houses is because they are investing their hard earned money in something which they can one day call their own and hopefully sell for a profit. And yes, people do DESERVE to make a capital gain if they are smart enough. Under normal conditions, property is a non-depreciating asset. I sure hope that you have some kind of investment (be it property or otherwise) to fall back on when you hit retirement, or you might find life not so enjoyable anymore.

Shawn
Apr 18 2008 11:03 Report this comment

Who would have thought that News24 could print such garbage. How can you predict a rise in the next 18 months? Statistically speaking.. its easier to predict the Lotto numbers for next week. It took 7 years to get the graph to go up... it should take at least another 5 years for it to go down. Stop spreading propaganda in the hope that folk will buy based on the emotion your article is generating.

Mako
Apr 18 2008 10:27 Report this comment

I'm sorry but surely you cannot blame estate agents for current prices. The market,comprised of willing buyers and willing sellers,determines what a house will sell for not someone with a few pamphlets and a pretty picture on a board. The rise in house prices was a result of massive foreign investment in what was seen as 'cheap' property,lowering interest rates and inflation as well as the advent of a new rising middle class. Anyway interesting article,guess some people can never see the good side of anything.

Romiko
Apr 18 2008 10:06 Report this comment

After the new Bill for Land expropriation and the recent events in zimbabwe, where the ANC assholes do nothing, I am selling off everything there and pulling out my investments, SA in the next zimbabwe, look at all the signs, if u cannot see it, you blind!!!!! Way to go ANC, for scaring off another Foreign Investors.


Your name
Email
Comment	(500 characters remaining)
	Please enter the text below(Case sensitive)


If you can see the following field, please ignore it, as it is used to verify that you are human.

	Disclaimer Fin24.com encourages freedom of speech and the expression of diverse views. The views of users published on Fin24.com are therefore their own and do not represent the views of Fin24.com. All posts are monitored by Fin24.com's editors and grossly derogatory posts will be deleted. The Fin24.com editorial team will delete your comment should you post abusive comments, use vulgar language or make discriminatory observations.