Senior Property Economist, Jacques du Toit of ABSA, reports that house growth in South Africa appears to be slowing again.
At a national level, property appreciated on average 3% in Nominal Terms. Allowing for inflation at 6%, this means in Real Terms property depreciated by about 3%.
Accoring to our research at Harcourts Platinum, property values in Somerset West have remained flat for the better part of 2011. The ABSA outlook predicts a similar pattern for 2012.
What does that mean for the consumer? The good news is that property prices are not falling, like they did in 2007. So, if you are a property purchaser looking for a home for your family, now is as good a time as any to buy. In fact, there is excellent value to be found from Sellers who listen to the Market and price correctly.
So shop around, and don’t hesitate to purchase a property that meets your requirements.
The bad news for property Sellers is that the economists don’t predict any improvement for 2012, and probably not for the next few years. So, if you need to sell within the next few years, you are better off pricing correctly and selling now, as your asset isn’t set to improve in value for a few years, especially if you allow for inflation.
The future is uncertain, and not just in South Africa, but even more so in Europe and the US. What we do know is that, historically, property has always been a sound investment. So, buy while the prices are realistic and the banks have an appetite for finance.
And, if you are need to sell your property then price it correctly and the Market will respond. But don’t hold your breath for any significant improvement in the next few years as the economists will tell you there is no evidence to suggest that this is likely to happen.