The SA real estate market in 2013

Private Property South Africa
Justin Clarke

So the general predictions from the economists and analysts predict that 2013 will continue to be gloomy, with house prices not even growing as fast as inflation. But what you need to remember is that predictions are a generalisation. We can’t expect a property boom when the economy is only expected to grow by 3% with even more dangerous macro-economic threats from outside our borders. But, within the broad range of real estate available there will be certain suburbs and property types that will perform far better than the national average.

There are a few trends that are likely to influence property in 2013. From research that we conducted late last year, 73% of agents surveyed said that security is now a buyer’s highest priority, so we can expect that property in gated estates or complexes will perform better than freestanding homes near vacant land, for example.

World liquidity will also not improve and banks appetite to lend so we can expect that they will continue to keep a tight lid on mortgage lending which will continue to subdue first time home buyers and the lower end of the market or the price range up to R800 000. The double whammy affecting this sector is not only the fact that banks will seldom take on a loan of more than 90% loan to value but that many buyers in this sector struggle with poor credit records. But I am going to go out on a limb here and predict that this sector will see some improvement in 2013. The increasing shortages of affordable accommodation for the growing public sector and wage increases way in excess of inflation will keep demand for smaller houses strong. I have noticed a growing number of buy-to-let investors moving back into the market encouraged by strong rental yields and also notice developers coming to life. If inflation stays in check, which it looks like it will, and affordability keeps improving we must assume that more buyers will soak up any available stock and start to push prices in this sector.

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