Posting a string of monthly property price gains that have elevated housing values 50% from the same time last year, South Africa is heading into the New Year with renewed optimism in a real estate market that is ripe for recovery. While an interest rate reduction has stimulated activity and helped level supply, those in the industry will find that technology can’t replace service as the essential element. See the following article from Property Wire for more on this.
Residential property prices in South African rose for a fourth month in November after the central bank cut interest rates and the recession ended, according to the country’s biggest mortgage lender.
The average house price rose 4.7% to 1 million rand ($134,454) last month from a year ago, after gaining 3.4% in October, Johannesburg based Absa said.
The Reserve Bank cut its benchmark interest rate by 5 percentage points to 7% between December and August, helping to spur consumer spending and end the first recession in 17 years.
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Experts at Absa now expect house prices to increase by at least 5% next year after an estimated contraction of less than 0.5% in 2009. ‘Housing market conditions are expected to improve further in 2010, but it is set to be a gradual process with nominal price growth forecast to remain in single digits over the next 12 months,’ it said in a report.
Property prices in South Africa are now more than 50% up on the same time last year and expected to do well in 2010, according to the Chas Everitt International Property Group.
‘Although this year has been an extraordinarily difficult one we are really upbeat about the next 12 months, especially with all the economic promise inherent in the Soccer World Cup,’ said Berry Everitt.
‘Indeed, homebuyers and investors seem to be gaining confidence by the day and the oversupply of stock that has plagued the market for many months is rapidly being absorbed, which will further underpin the price recovery,’ he explained.
Because banks are keeping a tight rein on credit there are no signs that property will return to the boom years of 2003 and 2007 but prices are expected to follow an upward trend. ‘We do foresee that an improving economy and spreading empowerment will ensure that demand keeps expanding and having a positive effect on real estate values going forward,’ said Berry.
‘At the same time, though, we believe that the events of 2009 and the new consumerism that has emerged as a result will permanently reshape the real estate industry. While technology will no doubt continue to enable better marketing campaigns and more informed decision making by property buyers, our research shows that the X-factor that will spell real estate success in future is high-level, old-fashioned personal service,’ he added.
He believes that a return to basics where those buying and selling can talk to a real person and being able to build a relationship with an estate agent based on honesty, trust and accountability will make a difference.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.