South African property trends have been a subject of immense speculation for a while—property owners have not been certain whether to buy or sell. Luckily, the year ahead seems to have good things in store as there have been evident signs of full recovery following the 2008 economic downturn. In connection with this, property demand has soared. This resurgence of investment has been attributed to a larger section of the middle class seeking accommodation in secure neighbourhoods, and locations that allow them an easy commute to work.
Knowing what’s going on in the property industry can give you an advantage when it comes to buying and selling. Take a look at these trends:
1. Selling Property on Auctions
The number of homes being put up for sale through auctions is progressively rising and this trend is expected to continue throughout 2015. Indeed, it is projected that up to a third of properties on sale could be sold solely through auctions in the next year. Like sellers, there appears to be a higher number of buyers who have realised the benefits of this concept, and have therefore fully embraced the approach.
2. Increase in Affordable Rentals
Based on a report compiled by Trafalgar, in the period between 2012 and 2014, South African apartment rentals went up by close to 15 percent. Despite that, the rocketing transport, food and fuel costs seem to have put a strain on household incomes. Owing to this, a significant number of tenants have kept away from renting high cost apartments. To keep up with this need, therefore, developers have begun to present consumers with more affordable housing solutions. There are now more new blocks coming up, and a good number are targeted at people earning an income in the range of R3500-R7000.
3. More Foreign Buyers
The sharp depreciation of the South African Rand in the recent past has seen the property market become more attractive to international buyers. Even though the percentage of real estate sales to foreigners has only been a small fraction of the overall sales, the numbers seem to be going up. Buyers are coming in not just from the UK, US, Netherlands, Germany and China, but from African countries as well. High end properties fetching steep prices of between 12-17 million Rand are being acquired by investors from Mauritius, Nigeria and Zambia among other Africa purchasers.
On the whole, reports show that the current demand for property in South Africa is too strong for developers to fully meet. In view of this, purchase prices are set to continue going up in the foreseeable future. Still, since a home is the only investment that investors can rely upon even when inflation is experienced, home ownership is the way to go regardless of the trends.