Residential property market likely to maintain its resilience and area is key when it comes to growth in house prices
The outcome of the ANC elective conference and February’s Budget Speech will affect business and consumer confidence as well as market sentiment in general, but it is expected the residential property market will maintain its resilience.
So says Dr Andrew Golding, chief executive of the Pam Golding Property group. “From a housing perspective, there is a pent up demand from a groundswell of aspirant buyers wanting to acquire a foothold in the property market, while others in the marketplace – both first-time buyers and existing homeowners – are seeking homes to buy or rent as career and lifestyle changes dictate a change in address.”
Another favourable indicator is that developers are continuing to bring new products to the marketplace across a range of price bands. Densification in major metros and economic hubs will “increasingly drive demand in the residential property market”.
“Interestingly in Cape Town, in line with this trend, the municipal by-laws were recently amended, thereby giving homeowners the right to build a second dwelling on most properties, as long as certain criteria are met.
“In addition, the live, work, play, shop concept continues to gather momentum partly due to major cities’ increased traffic congestion, while the transition to green energy and water-efficient homes will gain impetus not only for the purpose of sustainability and drought – as still evidenced in the Western Cape – but also due to the rising cost of utilities.”
Golding says he also anticipates a continued demand for secure estate living, both freehold and
sectional title, as well as homes
catering for the growing retirement
Sandra Gordon, PGP’s senior research and market analyst, says the latest PGP Residential Property Index shows national house price inflation has averaged at 4.14% for the first 10 months of 2017, losing some momentum lately, with an increase of 3.9% in Q3.
“While average house-price growth for 2017 is likely to be lower than the average consumer inflation rate, it is important to remember this is the average growth in prices for the entire national housing market, incorporating 6.5million homes in various locations and of various sizes and types.
“As an immovable asset, housing markets are hyper-local and house price growth is determined largely by the level of economic activity in the area, as well as migration trends, local housing availability and lifestyle trends.
“While there are overarching national trends, it is important to understand the dynamics of local housing markets and hence the likely performance of house price inflation in any particular area.”