Homes market remains more resilient now to adversity than in previous market downturns
Category Blog
It is astonishing just how resilient the South African residential property market can be – and has been – in the face of constant adversity. Even more so when you consider the magnitude of the issues the country continues to face.
Take, for instance, the sentiment-sapping serious deficiencies of governance, political leadership and economic performance that currently prevail. Also note the plunge in business confidence to its lowest point since the mid-1980s – more than 30 years ago; the toxic effects of the ongoing ‘State capture’ process; and upheavals surrounding constant Cabinet reshuffles. Also include dismal unemployment figures.
Then ponder the question marks over the ruling-party’s upcoming, potentially explosive, leadership conference in December. Add in the relentless – at worst, even death-defying – jockeying for position in the race to the new political leadership structure of the governing party. Against this intimidating background, home sellers and buyers may well be feeling that this is a market scenario from hell that is neither viable nor fixable. They would be wrong.
Constant market recovery
Issues of this magnitude have had far bigger consequences in the past. And the homes market has historically taken much more painful falls. But it has always recovered. This time will be no different. Faced by the current circumstances, residential property values in Gauteng have now clearly bottomed out. While values will certainly improve slowly in the near term, it is a market that is perfectly poised for an inevitable bounce-back.
According to the latest FNB estate agency survey, Gauteng’s three metros currently have the lowest average time for homes on the market. This says a lot for its dynamics. Furthermore, Gauteng remains the most price-realistic of South Africa’s major metro regions. It is also the most “solid” region, with an average time of 12 weeks on the market. *
A good time for a first-time buy
So, now is clearly a good time for first-time buyers to get a foothold on the Gauteng residential property landscape. Values are about as attractive as they can be in the current climate of political and economic uncertainty.
Looking at the broader picture, it is encouraging to note that South Africa’s overall economic outlook is seemingly becoming more positive. Indications are that the recession is receding and that the country is poised for a steady recovery in economic activity over the next six to nine months.
Furthermore, reports that the year-to-date trade surplus has grown to R43,5-billion, compared with a deficit of almost R14-billion in the same period last year, clearly bode well for property market sentiment – at least for the remainder of this year.
*Source: FNB Property Barometer
Author: Ronald Ennik
