Herschel Jawitz, CE of Jawitz Properties believes that the residential property market will show ‘measured growth’ in 2013 despite a slow economy and continued pressure on consumers’ disposable income.
The low interest rate environment and slow growth in property prices make it a good time to buy from a value and affordability point of view. The pent up demand that has built since 2008, when the financial crisis hit, is now releasing into the market. Buyers have realised that the market has bottomed out. Those who want to buy and can afford it are now in the market. There are very few buyers sitting on the fence at the moment.
“This is especially evident in the large metro areas such as Johannesburg, Pretoria, Cape Town and Durban where buyer activity has increased noticeably,” says Jawitz. “In some of the sought after areas there are a shortage of homes for sale and buyers know this. Buyers are far more educated and are doing their homework in terms of price, location and value. We are seeing buyers deliberating less and coming in with better offers than in previous years. Those sellers who are pricing their home in line with the market are getting better offers and selling faster. So there are some positive signs.”
The increase in activity is also being felt in the smaller cities such as East London and PE but the coastal leisure market still has a way to go. The supply of properties significantly outstrips demand and these conditions will persist for a while longer. Those who are selling in these markets, have to be ruthlessly realistic about the price, otherwise they are in for a long and frustrating process.
While the bank lending environment remains challenging, rate concessions have eased slightly and buyers are getting used to the new criteria in terms of deposits.
“We are continuing to see a gradual shift from a buyers’ market to something a little more balanced. Real growth in house prices above inflation may not be on the cards in 2013. Nevertheless sellers should see improved demand and buyers will need to re-look at the market from a price point of view if they want to secure their dream home,” he says.