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Lack of affordable housing could slow house price recovery

By Staff Writer

Property experts believe that the biggest obstacle the housing sector faces is lack of affordable housing. In a statement released last week, a property group said that this lack could lead to the slowing of house price growth to single digits later this year.

"Without growing demand, price growth will decline," Harcourts Africa property group said in a statement.


Martin Schultheiss, CEO of Harcourts Africa, believes the biggest need in the market was in the essential buying category.

"People need an affordable roof over their heads, as opposed to leisure or speculative buying."

Not only are more affordable units needed for prospective home-owners but the rental market also needs stock in order to sustain an affordable rental market.

"The household sector remains under pressure, with the latest figures showing the ratio of debt to disposable income still at nearly 80%," Schultheiss said.
This is, of course, bad news for all hopeful home owners, especially those who are looking to get into the lowest end of the property market. What this means is that these people will be eagerly searching for affordable rental homes in order to help manage their finances.

"Developers would do well to take note of this need and adapt development plans to cater for this sector.

"Although affordability is a common denominator, property investors are also looking for additional features - and developers who want to tap into this market should take heed."

Schultheiss revealed that small and compact properties with easy access and durable surfaces for easy maintenance is what attracts investors.

"Tenants typically occupy units for an average of two years and landlords are keen to keep refurbishment costs to a minimum at the end of a lease period."
Investors also prefer purchasing units with appliances already built-in and, of course, pre-paid electricity meters.

"And of course affordable units with low maintenance requirements would find favour among owner-buyers too," he added.

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