As the new year kicks off, the property outlook for South Africa and Cape Town is looking positive, as property experts say those who invest in properties early are sure not to regret their decision.
“South Africa’s residential market is in for an interesting time in 2019, but our predictions for the year are all positive, and we believe that home buyers and investors who take the plunge and buy early will be well-rewarded,” said Berry Everitt, CEO of Chas Everett International property group.
Everett encourages buyers to not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains.
“With the US / China trade war and the ongoing Brexit saga dominating the news, many investors around the world are just sitting on the sidelines at the moment and waiting to see how things turn out. But SA is actually benefiting from the current situation, with the weaker pound and dollar being good for the rand, and low oil prices enabling fuel price cuts,” says Everitt.
The shaky world situation is also expected to give a further boost to local home demand and sales, he says, “but even as things are, SA banks are keen to lend to home buyers, household debt is at a 10-year low and recent statistics from Lightstone and BetterBond show that SA is already quietly gaining about 77 000 new home owners a year.”
Everitt also says that urbanisation is happening at a rapid rate and developers are anticipating a significant increase in the demand for rental homes, with plans to build more than R40-billion-worth of new private sector housing over the next two years.
“Millions of SA consumers are also taking financial strain because of the VAT increase last April, the very high fuel prices during 2018 and the ever-rising cost of electricity and other utilities. And now we are being subjected to increasingly loud and distracting political in-fighting ahead of the General Election in May, so it is not really surprising that many prospective buyers and investors are deciding to ‘wait and see’ how things turn out before making any further commitments to the market.”
But, he says, this could end up being an expensive decision. “Barring disaster, we are anticipating a surge in prices following the Election, which will mean that buyers have to earn more to afford the homes they want, take out bigger bonds and pay higher monthly installments. In addition, they will have missed out on the substantial value growth that they would have gained by buying now, while prices are still relatively suppressed.
“Those who do buy now, on the other hand, will gain that post-Election jump in the value of their property, and enjoy the benefits of a smaller monthly bond repayment. In short, they stand to derive the maximum possible advantage out of the strong market recovery that we foresee taking place over the next four years.”