Residential property marketers, always on the lookout for signs of an upturn are inclined, says Tony Clarke, MD of Rawson Properties, to overemphasise the positive indicators as and when they appear.
However, he says, a statement made by Rawsons chairman, Bill Rawson, to the effect that increased car sales augur well for the property sector, is valid.
'Traditionally, rising car sales have always been a prelude to a property upturn,' said Clarke.
Even more significant, he adds, has been the recent Fitch Ratings statement which indicates that, despite high unemployment and low consumer savings, retail and wholesale growth will accelerate from mid-2011 onwards.
'An upturn in the retail sector,' says Clarke, 'always heralds a rise in house sales and later a rise in prices'
The Fitch report, already widely covered in the financial press, says that the South African economy has moved into a sustainable growth phase with 4,4% GDP growth in the last quarter of 2010.
Although the retail sector could eventually feel the impact of year end interest rate rises (already predicted by Clarke in February) increased inflation and extra competition, Fitch says that a majority of retailers anticipate improved sales in the second half of this year.
Recent figures from major retailers, said Fitch, support their more confident outlook: Shoprite had a 9,5% growth in the six month to 31st December. Pick '˜n Pay reported 6% growth in the six months prior to 31st August 2010. Statistics South Africas figures reveal that in comparison with the same period in the previous year retail sales in the three months prior to January 2010 grew by 7,7% in real terms. Surprisingly (to some) the biggest increase (17.3%) was in the household furniture, appliances and equipment sector.
'One swallow does not make a summer but this report gives grounds for expecting a noticeable upturn in the housing market by the end of this year,' said Clarke.
This view was corroborated by Annette Evans, PropStats manager at the Western Cape Institute of Estate Agents who said that although house price increases have thus far been seen only in a few small pockets of Greater Cape Town, price falls appear to have ended and a recovery should be evident before the year end.
For further information contact Tony Clarke on 021 658 7100 or email tony@rawsonproperties.com.
