While there were no major surprises, Medium Term Budget Policy Statement which stressed the need to focus on macroeconomic stability, supporting and stimulating economic growth and implementing structural reforms – and coupled with encouraging comments regarding public-private collaboration – is expected to help create stability and boost sentiment towards South Africa from both an international as well as local market perspective, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“From a residential property point of view, together with the recent interest rate reduction and anticipation of further interest rate cuts, financial pressure on households is finally beginning to ease. Combined with a recovery in consumer confidence, we are already seeing increased activity in the market – with one notable indicator being the growth in demand for investment or buy-to-let properties, as well as stock shortages in high-demand areas.
“According to ooba Home Loans, applications from first-time buyers rose to 51% in September 2024, while prices paid by first-time buyers in the Western Cape have risen by an inflation-beating +10.8% during the year to date, and in the Free State, first-time buyer prices have risen by a robust 6.5%.
“The rebound in national house prices continues to gather momentum, rising to +4.9% in September 2024, combined with an unexpectedly sharp and encouraging easing in consumer inflation to +3.8% and averaging +4.54% in Q3 2024 – positive indicators for a continued recovery in the local housing market. The decline in inflation at a time when the recovery in house prices has seen real (inflation adjusted) growth in house prices return to positive territory in August and September 2024 – for the first time in three years.
“Certainly, the prospect of further interest rate relief and increased consumer confidence – at a time of improved optimism regarding the country’s economic growth prospects - set the stage for a recovery in sales activity during Q4 2024 and into 2025,” says Dr Golding.
