RESIDENTIAL PROPERTY MARKET ON THE RISE
Category News
DESPITE a weak economy and continued pressure on disposable income, the residential property market is showing a marked increase in activity and demand across all price levels, according to Jawitz Properties CEO Herschel Jawitz.
Mr Jawitz said on Friday that for the first time since 2007 and 2008, "we are seeing demand exceeding supply in the large metro areas such as Johannesburg and Cape Town".
As property prices are "increasing gradually" while interest rates are at 40-year lows, "the ‘wait and see’ approach from buyers has changed to a let’s get into the market and buy approach", he said.
Mr Jawitz said this was reflected in better-than-expected house price growth figures reported by banks.
This year "may be the first time in five years that we see real house prices increasing, or at the very least not falling — even with inflation at 6.4%", he said.
Standard Bank’s House Price index (HPI), released on Wednesday, recorded a moderation last month, rising by 6.9% year on year, from a revised 7.6% in August.
Standard Bank economist Sibusiso Gumbi said on Thursday to date 2013 household mortgage growth was an improvement on last year. Also, "while not expected to shoot the lights out", the index was on course to record a marginal improvement in 2013, with year-to-September improvements averaging 7.5% compared to 7% for the same period in 2012.
However, lacklustre macroeconomic supports are likely to constrain HPI improvements to single-digit territory this year.
FNB household and consumer sector strategist John Loos said last week the residential market’s position remained one of "stability but no fireworks", as average house price growth generally continued to track inflation, "implying virtually no movement in real price levels".
The FNB House Price index showed further slight acceleration in its year-on-year growth rate, from the previous month’s revised 6.3%, to 6.6% in September.
http://www.bdlive.co.za/business/property/2013/10/07/residential-property-market-on-the-rise
Author: BY NICK HEDLEY, 07 OCTOBER 2013, 10:09 | BUSINESS DAY
