Amid continuing negative reports that claim more recession-related backlash is in store for South Africa, RE/MAX regional sales reports from across the country have indicated that the South African property market is finally over the worst.
Adrian Goslett, Assistant Regional Director RE/MAX of Southern Africa, notes that the reports show the group’s numbers have shown a solid increase of 30%. Another point of pride for the group is the fact that in 2008 RE/MAX had 3% share of all estate agents operating in the South African property market. Today, the brand’s share of agents has climbed to 6% - no mean feat in a period where a large portion of agents have dropped out of the property sphere all together.
“The ‘groot skrik’ is verby. Our top 100 agents,” says Goslett, “have earned more commission in the first six months of this year than they did for the first six months of 2008.” Goslett believes that in the current market space there is pent up demand for property as both buyers and sellers have been biding their time and waiting for things to get better. He says the recent increase in activity is the first pointer to the normalisation of the market.
But, Goslett emphasises that the South African property market is not going back to the same levels that were seen in the boom times. He explains that when our interest rates plunged, it fuelled house price increases of 30% per year. “But this is a transition that won’t happen again anytime soon as an annual growth of 30% is simply not normal and is unsustainable.”
That said, it is expected that for the short term house prices will level off, or show slight value growth until the economy stabilises further. Activity on the other hand, is expected to continue showing acceleration.
Goslett notes that perhaps one of the most important contributing factors to ongoing increased activity in the property market is that banks are relaxing their lending criteria and coming to the party when it comes to granting home loans for credit-worthy buyers. “Furthermore, the recent 0.5% reduction in interest rates is expected to give the market a much needed additional boost,” Goslett concludes.
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