Recent economic reviews from the Standard Bank and Absa, have shown that SA property prices are still rising satisfactorily albeit not at the pace previously experienced '“ and have in the last quarter jumped ahead of forecasts '“ says Bill Rawson, Chairman of Rawson Properties, the real estate marketing group now active in seven provinces.
'The less positive news,' said Rawson, 'is that four factors have led to a more negative perception of our basically healthy macro-economy. These are the strikes, the latest crime figures, the higher interest rates and the National Credit Act '“ but property continues to be seen as a secure investment haven and is increasingly pursued by the new middle class'
The latest Standard Bank figures, said Rawson, are encouraging. They show that the median house price (which is not the same as the higher average price) rose from R580 000 in April to R620 000 in June. This, the review points out, equates to a year on year rise of 18,5% which, says Rawson, is higher than he and most agency chiefs had predicted.
The review, adds Rawson, suggests that the dip in base values a year ago and the recent rush to get loans ahead of the Credit Act have probably boosted April to June figures and the growth is unlikely to be as good in July to December.
'By contrast, the five month average growth rate was calculated at 10,8% year on year '“ which is in fact slightly lower than my December forecast,' said Rawson.
However, the review also says that increased employment opportunities (17 000 new jobs were created in the first quarter of 2007) and a reduction of the redundancies (brought about in pursuit of greater efficiencies) coupled to the 5% plus growth rate make prospects for residential property in the year ahead still good.
'The review shows that insolvencies are at a ten year low, the debt repayment to income ratio has improved markedly and a prime interest rate of 13% is not yet a deterrent. The SA residential property market, therefore, is still a good place to be,' said Rawson.
