Property experts weigh in on 2017 outlook

Cape Town - Global uncertainty makes property an attractive investment, with potentially good returns and the opportunity for capital preservation, according to Dr Andrew Golding, chief executive of the Pam Golding Property Group (PGP).

Golding anticipates that 2017 will see the continuation of a number of prevailing trends. These include the desire among first time buyers to acquire a foothold on the property ladder and own their own homes and an ongoing trend towards investment in mixed-use developments mainly in metropolitan hubs, as well as the development of secure private estates and sectional title complexes.

"This incorporates the growing popularity of a convenient lifestyle within easy reach of all amenities and transport, and encompassing the live, work, play and shop concept," said Golding.

Another trend he pointed out is the transition to "green" and sustainable living as pricing pressures resulting from the prolonged drought and rising electricity tariffs will see a continued shift to energy and water efficiency.

"Furthermore, the importance of understanding the dynamics of the housing market when making a sound investment decision. These include factors such as the ongoing migration of people, supply of new housing units and lifestyle trends,” said Golding.

Smart pricing

A key theme for the property market in 2017 will be smart pricing according to Samuel Seeff, chair of the Seeff Property Group.

"We have seen the market contract in 2016, demand has dipped in line with the slower economy, more property listings are coming through and buyers now have more to choose from," explains Seeff.

"As the market pendulum shifts towards buyers, the challenge will be on for serious sellers to realise that they are now competing with other properties and will need to set their asking price expectations at the right level."

He adds that the right price is that which will attract buyers and offers.

"There is a difference between the municipal value and the market value. The former is the value that the local municipality attaches to it for the purposes of charging property taxes while the latter is the value that a willing buyer attaches to your property. In other words, it is the price that you will get for your property in the open market," says Seeff.

"This selling price tends to differ and no two houses sell for the same value, unless it is a new development. Many factors come into play. It is often tempting to look at what other houses in your area are selling for and to then think that your house could sell for a similar price and that you may be able to make quite a handsome profit."

Research has also shown that properties that start at a too high price tend to sell for less compared to what they would have if the price was set at the correct market level in the first instance. You also risk buyer fatigue.

Creative ways

Ashley James, co-founder of online property seller PropertyFox, anticipates 2017 will be a time when consumers look for creative ways to make their properties work for them.

There are five key changes PropertyFox expects to see in 2017. These are that estate agent commission coming under scrutiny; fibre in the home becoming a growing sales point; owners finding other ways to earn income from their homes; "mom and pop investors" swapping stocks for brick and mortar; and houses with boreholes being more attractive than those with pools.

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, moving into 2017, all eyes will be on the rating agencies and whether the SA’s credit status is downgraded to junk status.

"If the country is downgraded to junk status during the course of next year, access to finance will become more expensive and interest rates will soar," says Goslett.