Opportunities abound in Jo’burg homes market
Category Blog
There are bargains to be had right now in the Johannesburg residential property market which, I believe, is at a turning point. It has been a long time since the buy value in the city’s Northern suburbs and Sandton has been as attractive as it is right now – not least for first-time home buyers. Given that budget is their primary driver, they are currently spoilt for choice in a market which is now radiating affordability.
This is reflected in the fact that first-time buyers in Johannesburg accounted for more than a quarter (27%) of total home sales in the last two (summer) quarters – followed by Tshwane (formerly Pretoria) at 21%. Cape Town came in at 8%.* Given that these (predominantly young) buyers will inevitably upgrade to bigger and better homes as their careers and families grow, this trend reinforces the longer term outlook for Gauteng residential property.
Taking the plunge
Meanwhile, many cautious ‘wait-and-see’ Johannesburg buyers seem set on remaining on the sideline until the current cloud of political and economic uncertainty lifts. In doing so, they may well be compromised on price and choice as the market turns and they decide to take the plunge. Nevertheless, it is encouraging to note that there are already early signs that the overall homes market outlook for the rest of 2017 may be marginally firmer.
Positive indicators
Firstly, the International Monetary Fund (IMF) has lifted its economic growth forecast for South Africa. Furthermore, a bumper maize crop is expected this year after one of the worst droughts in living memory. At the same time, mining and manufacturing production is trending upwards. This is all good for national sentiment – which remains the key driver of the homes market. Unfortunately, the feel-good effects on the residential sector of these and other positive economic indicators will inevitably be diluted by the persistent cloud of uncertainty that continues to overhang South Africa’s political landscape.
A changing scenario
But the scenario is changing. More and more corruption and “state capture’ issues continue to come to the fore as whistle blowers follow their conscience; as ‘watchdog’ institutions continue to wave red flags; as investigative journalism continues to go about its business; and as the judiciary increasingly becomes the ultimate ‘go to’ for rulings on contentious political and administration issues.
In effect, this is a cathartic process. Ideally, it provides a platform on which dodgy State officials at all levels will look carefully at their futures and make better and more transparent decisions in future. The positive impact on buy/sell sentiment and decision making in the homes market will be profound.
*Source: FNB Property Barometer – Gauteng sub-region
Author: Ronald Ennik
