Safe as houses still holds true amid global uncertainty

A RECURRING theme internationally, both historically and currently, is that global uncertainty makes property an attractive investment, with potentially good returns and the opportunity for capital preservation.

Amid subdued economic growth and with an eye on global volatility, the country’s housing market remains resilient in the face of a range of economic and sociopolitical challenges, demonstrating ongoing, underlying consumer confidence in this increasingly popular asset class.

Owning a home is a key imperative for a broad range of people across all regions and walks of life, including a savvy, younger generation, not only in providing a secure roof over their heads but also as a sound investment over the medium to longer term.

Indicative of this is recent data from mortgage originator ooba, which reports that during 2016, 95% of purchases have been for a main residence, with 4.7% acquired for investment or buy to let purposes, and the balance of 0.3% for own leisure use.

In this respect, this year is no different and we believe the current economic trading conditions underscore the importance of understanding the dynamics of the housing market when making a sound residential property investment decision.

Apart from the more obvious factors such as location and access to a range of amenities, these include other aspects such as the ongoing migration of people, supply of new housing units and lifestyle trends.

This year we anticipate seeing a continuation of a number of prevailing trends among buyers and sellers such as: a move towards sustainable eco-friendly living with less reliance on the grid; a general trend towards simplicity in terms of building style, lifestyle and convenience – people are seeking simple, convenient living with easy access to amenities such as that offered by sectional title complexes; and an ongoing demand for secure living – estates will continue to be in demand as security will continue to be a driving factor in the market.

In addition, we are hoping to see more stability this year and with it a resurgence of confidence in our local markets. We also believe that the KZN coastal strip from Durban through to Ballito will continue to be highly sought-after for investors and end-users alike.

Given the ongoing desire among first time buyers to acquire a foothold on the property ladder and own their own homes, we are optimistic that affordability will improve this year. The bond decline rate for 2016 was high due to a number of factors, namely, conservative lending, credit scoring and general issues with affordability.

With 2017 poised to be a better year from an economic perspective, this is expected to have a positive knock-on effect on buying power in the property market.

One of our biggest challenges has been weathering the storms of economic and political instability. My advice to our clients is to ensure they do not overextend themselves, so that even if the economy is volatile, the impact of this volatility is buffered by sound financial planning.

Reynolds is the Pam Golding Properties area manager for Durban Coastal.

For further details visit www.pamgolding.co.za or contact Pam Golding Properties KZN at 031 207 5584.