The property market in the major metropolitan areas, particularly Gauteng and the Western Cape, is still strong and we see a lot of activity in the prominent suburbs. However in other areas of the country the property market is still in the doldrums.
According to a recent Lightstone report, national house price inflation is currently 7.6%, in comparison to consumer inflation of 6.4%. House prices are increasing faster than inflation in Gauteng (7.9%) and the Western Cape (7.0%), but below inflation in KwaZulu-Natal (5.6%) and the Eastern Cape (4.6%).
Price increases for sectional title properties are outstripping those for freehold homes.
The usual suspects, the northern suburbs of Johannesburg and the Southern suburbs and Atlantic seaboard of Cape Town, have shown impressive increases over the past few months although there are indications that the market in Cape Town is taking a breather.
Despite the tough economy making affordability difficult for buyers, growth in prices means property is still a primary choice for investment, not only for property investors, but for families too. Steeple, the low cost estate agents, note that property is a particularly attractive investment when the high cost of estate agent commissions can be eliminated as it is then so much easier to make a profit on the sale.
The rise of digital property portals has also made it a lot easier for buyers to locate good opportunities which has undoubtedly spurred buying, particularly in the urban areas where buyers have broadband access.
David de Waal (CA(SA))
Steeple – Low cost estate agents