House price recovery ahead

By Staff Writer

Elma Kloppers, Beeld

17 April 2008

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.

 Need a loan for a new home? Click here to apply
 

"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.

 

 

Recent Articles

Featured Debt consolidation – Explained

Dealing with debt can be daunting. If you’re struggling to keep track of which store account to pay next and weighing up which credit card is more important to settle first, you may have considered debt consolation. At Justmoney, we’ve decided to get down to the basics and explain what this entails and what impact you can anticipate on your credit score.  

Read more

3 Vehicle financing options compared – which is cheaper?

Buying a car is a considered a milestone, both in life and financially. Unless you’re able to fork out the cash, many opt for financing. But often the excitement to drive it off the showroom floor overshadows the need to check if you’re choosing the most-suited option. To help you make the best-informed decision we compare available vehicle financing structures in South Africa.

Read more

Splitwise: Split the bill not the friendship

Collecting your friends’ debt to you can be draining. You don’t want to ruin your friendship with them, and it can also be extremely awkward. I don’t know how many times I have written, deleted, and rephrased texts, reminding people to pay what is due to me.

Read more

Stokvel-friendly accounts – which one is fair?

The stokvel economy is approximately worth R49 billion in South Africa. This is according to the National Stokvel Association of South Africa (Nasasa). Altogether 24% of these stokvels are in Gauteng, while only 6% are in the Western Cape.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Cape Town Fish Market Swartland Special

Price: From R123
When: Until 14 July
Where: Cape Town

Aha Casa do Sol Pay 2 Stay 3 Special

Price: R1,200
When: Until 31 July
Where: Mpumalanga

Open University Free Courses

Price: Free
When: Daily
Where: Online