If you were thinking of selling your house and jumping the pond, you might want to reconsider.
South Africa’s property market is not in a great place right now.
This, according to Samuel Seeff, chairman of the Seeff Property Group who is expecting the recovery to be slow in the build-up to the 2019 elections.
The outcome of the elections will impact the economy, which in turn will impact the property market, reports BusinessTech.
“The recently renewed Eskom crisis has again reminded that the economic and governance challenges are deeper than anticipated when President Ramaphosa took the reins last year. Although the GDP growth outlook for the year is better, it should be noted that the World Bank recently adjusted it downward to 1.2% (from a previous 1.4%),” Seeff said.
Fuel and electricity hikes are putting a serious strain on consumers’ budgets, which makes it harder for people to service their debt. The knock-on effect of this is that people have less cash to spend on residential property.
“Although the market remains active, we are still trading at 20%-40% below the 2015-2017 highs,” he said.
Price growth has declined since last year, and according to the latest FNB Price Index is at 3.8% y/y for March which is marginally below the CPI inflation rate. Along with that, a deteriorating demand-supply balance point to an increasingly favourable market for buyers.
The favourable market is supported by a positive mortgage lending landscape and flat interest rate.
FNB also recently reported that selling due to financial reasons and emigrating is on the rise. It now takes on average 15 weeks and six days to sell a property compared to the market average of 12 weeks.
While slightly faster compared to the third quarter of 2018, perhaps because the early part of the year is always busier for agents, it now takes much longer to sell, Seeff said.
The bank also reports that 94% of sellers now have to drop their asking price by an average of 9% to conclude a deal.
The property market is expected to remain relatively flat for the foreseeable future.
The long and short of it is that you might want to hold off on selling until conditions improve.
[source:businesstech]
