Market set to languish
It may be the best time to buy a house since the global economic crisis, but an influx of new buyers is unlikely in 2019, according to Herschel Jawitz, head of Jawitz Properties.
It may be the best time to buy a house since the global economic crisis, but an influx of new buyers is unlikely in 2019, according to Herschel Jawitz, head of Jawitz Properties.
In 2018, the average house price in SA grew by only 3.7%, the lowest growth in seven years, said FNB property sector strategist John Loos. It was the third straight year that house price growth had fallen in real terms, once inflation had been stripped out. The average house price growth recorded in 2017 was 4.2%.
It is therefore a good time to get into the housing market, which looks to have bottomed out, according to Jawitz.
“I don’t think prices will fall off a cliff in SA overall this year. It’s more likely that we’ll see similar growth to last year unless we get a sudden boost in economic growth,” he said.
Property price growth across all the major metro regions is expected to remain subdued in the first half of 2019, and the national nominal price is expected to grow 4%-6%.
“The 2019 residential market will continue to offer buyers the best value in terms of property prices and buying opportunities since the 2008/2009 market crash,” he said.
The biggest factor preventing house sales is a lack of confidence, Jawitz said. “Consumer confidence holds the key to any possible turnaround in the residential market in 2019. While consumer confidence remains in positive territory, it has not yet translated into an increase in the demand for property by buyers,” he said.
Homes are taking an average of three-and-a-half months to sell with this extending to six months and more at the top end of the market. There is an oversupply of residential property across almost all price ranges in the resale and new-build or offplan market.
Loos released a report on Thursday that said new mortgage lending is under pressure.
The December 2018 Reserve Bank Quarterly Bulletin showed the value of new mortgage loans granted for residential, commercial and farms had declined at a year-on-year rate of -15.91% in the third quarter of 2018, down from +6.08% in the previous quarter.