The 2018 Leapfrog Property Market Forecast
Category Newsletter: Lead Article
The 2018 Leapfrog Property Market Forecast
South Africa’s been through a number of upheavals during 2017 – from the firing of Pravin Gordhan to the ratings downgrades - with more to come after the recent 54th ANC National Conference. This time of instability is likely to continue in to 2018 and many might wonder what this bodes for the residential property market.
“Regardless of the current political and economic climate, people need places to live and so the property market carries on. That being, said there are a few trends we’re predicting for 2018,” says Bruce Swain, CEO of Leapfrog Property Group.
The bad news
Amid expected poor growth in GDP (1% if we are lucky), households will come under increased financial stress and utilities, transport and school fees will likely increase faster than salaries.
“The recent ANC elective conference and the run-up to the 2019 elections, as well as the ongoing state capture exposes and the woeful performance of Eskom, the SABC and SAA, will weigh heavily on current and potential homeowners, who could well delay their property decision making,” believes Swain.
At present the interest rates remain steady, but these could come under pressure to increase as the impact of ratings downgrades take effect.
Swain indicates that there’s currently plenty of stock on the market – particularly over the R2 million price range, possibly due to a combination of affordability, political uncertainty and the fact that there is on average a 20% gap between sellers’ asking prices and what buyers are prepared to pay.
In terms of property prices year-on-year increases will struggle to keep up with inflation, i.e. a five to six percent annual increase. That said, demand for property and house prices are well above 2008/9 levels.
The good news
“There’s quite a bit of good news, especially for sellers and developers under the lower end of the market. Properties up to R1,5 million are in great demand and developers are already targeting this price bracket. Considering that these properties are more affordable for first time buyers, and that no transfer duty applies to properties bought off plan – everyone wins,” explains Swain.
Recent statements released by BetterBondSA indicate that banks are awarding bigger home loans, and doing so more readily, subject to the size of a buyer’s deposit and affordability.
Property Hotspots
While the property prices are showing some decline in general, there are several hot spots around the country that are bucking the trend. These include the Western Cape, Midrand and the Natal North Coast.
“Sellers with accurately priced properties in these markets are often getting their asking price, and doing so in record time,” says Swain, “These areas are increasingly in demand due to a number of factors ranging from perceived safety, better run municipalities, centrality and scarcity which can make it tough for buyers.”
Swain advises sellers to remain realistic in their asking prices and for buyers to be prepared when house hunting; “Make sure you’ve got bond pre-approval, have a deposit in place and know where you’re wanting to buy and what you can afford to spend.”
Swain believes that the services of an experienced estate agent remain vital in terms of negotiating the best possible deal for both buyers and sellers – especially in sought after areas where sellers might be tempted to ask unrealistic sales prices which leads to their properties stagnating on the market for months. Buyers also benefit in that properties in popular areas are selling quickly and an estate agent can not only assist in terms of finding the right home, but in ensuring that the offer to purchase gets to the seller in a timely fashion.
Leapfrog Property Group
Leapfrog Property Group offers a fresh and innovative approach to buying, selling, renting and property investments, ensuring the best property deals for clients across South Africa. Our agents are qualified, trained, experienced; our approach bold and spirited, driven by heart, generosity and honesty. It is our mission to advise, eliminate obstacles and save you unnecessary expense. Trust is our watchword. And value our motto. Armed with our combined credentials, we are the bright face of excellence in the South African market.
Find us at: http://leapfrog.co.za/
Author: Leapfrog Property Group
