The fact that the Standard Banks latest Residential Property Gauge records a decline in year-on-year growth of 5,2% for March and shows no year-on-year growth in February is not a cause for alarm or for holding back on house purchases and residential property investment, says Tony Clarke, MD of Rawson Properties.
'Some of the people with whom we deal,' he said, 'have come to expect the 2000-2006 boom to last for ever. This is ridiculous: anyone who has been in the real estate sector for some time will know that '˜right-sizing always occurs at some point - and was certainly due here after six years in which the average growth rate was 16%'
This phenomenal boom, said Clarke, had greatly increased the wealth of existing property owners but a readjustment was absolutely essential now if property was not to price itself way beyond the reach of a substantial section of the population, especially those buying at budget entry level prices.
'For this reason we can in fact welcome the adjustment now taking place,' he said.
Shrewd property investors, said Clarke, have always accepted that property is a long-term investment and that slow growth periods inevitably give way to upsurge phases.
Asked just how significant - and how sustainable - the next upswing might be, Clarke said that he expects residential properties to grow by 60% on the current value by 2011 and he is predicting that the upswing will begin to be evident from the first quarter of 2009.
'I definitely do not want to be accused of trying, in typical estate agent fashion, to talk up the market - but I have to admit that I get irritated by the panicky, doom and gloom reports one sometimes reads.
'Residential property has always been a stable long-term investment. At Rawsons we have sufficient faith in South Africa to believe that we will see significant property growth, albeit on a smaller scale, taking off within the next 12 to 15 months'
