Mar­ket set to lan­guish

Business Day - - FRONT PAGE - Alis­tair An­der­son Prop­erty Writer an­der­[email protected]­nesslive.co.za

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.

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