Private Property South Africa
Justin Clarke

It’s a warm fuzzy feeling that hangs over the property sector this Christmas, thanks to our improving economy and a more stable world outlook.

As predicted the Reserve bank gave us another boost lowering interest rates again resulting in a prime rate of 9%, now the lowest interest rates we have enjoyed since December 1973 and 33.5% lower than this time 2 years ago.

If you think about it that means that if your bond cost are now only 2 thirds of what you were paying in 2008, and add to that the annual increases that would have been added to the incomes of those lucky enough to have formal employment, (even luckier if you worked for government ) and the average family should be well in the black, even with some disposable income for Christmas.

And this will filter down into the residential housing market. FNB building confidence index, shows its first signs that building activity will begin to recover later in 2011. Building recovery normally starts in the residential sector and the index shows a marked improvement ( index improved from 29 to 38 for the last quarter of 2010 )

So with all the challenges facing the residential property market the big picture looks brighter.

But for the investor it means that the window is slowly closing as improved economic conditions bring new buyers into the market, developers surplus stock gets absorbed, banks clear their portfolios of repossessed homes, and prices move upwards as price inflation kicks in, and of course interest rates generally follow the upward trend.

It certainly looks like sellers will become price makers again in the new year, so i am still of the view that its time to build your portfolio - Buy...

Looking to sell your home?
Advertise your property to millions of interested buyers by listing with Private Property now!
List your home privately


Found this content useful?

Get the best of Private Property's latest news and advice delivered straight to your inbox each week

Related Articles

Is the interest rate going up this week?
Economists from Firstrand expect the interest rate to increase by 25 basis points this week. Find out the implications for the property market if this happens.
Is the property market beginning to turn?
Things are beginning to change in the property market and while it may be too early to say if the shift will have a long-term effect, it could mean that sellers are in for a slightly bumpier ride.
U.S. Real Estate Update – June 2014 – what you have to know
Nominal growth in the U.S. housing market continues in 2014. Existing home sales rose 1.3 percent to a 4.65 million unit pace. The gain was the first since December and was driven by a big uptick ...
ABSA Housing Review - 2nd Qtr 2009
The South African economy contracted at a real annualised rate of 1,8% in the fourth quarter of 2008, while data on various short-term economic indicators released in the first few months of 2009 indicate that the economy is most ...