It is encouraging, says Tony Clarke, Managing Director of the Rawson Property Group, that South African homes are now at last rising steadily in value, on average, according to the latest Lightstone survey,by some 6,5% per annum. What is more, he says, these rises are not confined to the affordable category – although value increases here are high: top end properties, i.e. those above R3 million, have also for the first time in many years shown a slight (4%) increase in value.
These figures, says Clarke, correlate closely with those of ABSA, whose latest year-on-year review shows a 1,1% increase in middle bracket housing, a 0,8% increase in large houses and a 10,4% decline in prices for small houses, i.e. those below 140 m2 – and the Lightstone prediction is that in the year ahead price rises will continue at ± 6%, with the graph indicating further slight increases in the months to come.
“There has,” says Clarke, “been a steady decline in the sale execution notices and in the actual sales carried out following such notices. By the third quarter of 2012 the number of sales in execution per month had dropped to a few hundred, whereas the figure in 2009 was over 3,000 per month – and in the second quarter of 2009 it was still above 2,500.”
In 2008/2009, Nedbank, had the largest number of properties in possession, says Clarke, but all banks are now roughly on the same level. The big improvement here, he says, has resulted in less than 5% of sale in execution notices, now actually resulting in the home being sold.
“I think that the survey indicates that a recovery in residential property has already begun and will continue, albeit slowly: Lightstone’s price rise predictions, although cautious, are positive – they predict a 6% rise in house prices for 2012/2013. It is now up to the banks to regain a willingness to take on more risk – within the provisions of the National Credit Act – in the home loan market, which is totally reliant on bank finance of this kind.”
