Cape – although it is
that this can be ascribed to ‘semigration’ from up-country. Confirmation of this hypothesis can be seen in the traffic in Cape Town, which has become worse than traffic in Joburg.”
Apart from Cape Town, Rode expects house prices to grow at less than the inflation rate for many years, which will make a house financed by a high mortgage bond a poor investment.
Explaining the reasons for pessimism regarding the growth in house prices, he explains that, firstly, house prices are still “very high” in real terms and have lots of potential to gradually decline in real terms, and, secondly, that South Africa’s economy is “now on a low growth path”.
“This means the current recessionary conditions are not a normal cyclical affair with a sharp recovery thereafter.
“Rather, it should be seen as a structural malaise which will