Property news - Australian property trends very similar to those of SA

Mike Greeff, CEO of Greeff Properties, recently returned from Western Australia (where he signed an association agreement with Perth estate agency, Glen O’Brien Real Estate) with the message that the current lull period in the residential property market is being experienced more severely in Australia than it is in South Africa’s Western Cape.

“It should,” he said, “be a comfort to many that what we are going through is a global cycle, not just a local slump, and the good news is that the Australians recognise this and are already predicting an upturn by mid 2009. We need now to take on board some of their optimism.”

Greeff drew attention to a Perth newspaper report in which a local developer, James Limnios, said that for five or six years the Perth property market had experienced unprecedented growth and this had resulted in investors becoming overconfident and overextended.

“The Perth newspaper reported that there had been a never-ending surge in speculation and that when the interest rates finally rose some developers were left with unsold apartments. However – and this is relevant to the SA situation – correctly priced, well designed units in Australia are by and large holding their value or have seen price drops of less than 10%.”

Limnios, said Greeff, had advised his clients that now is a good time to buy provided that they look for real value. He found it interesting that two new competitively priced Perth apartment developments are selling steadily, although at a far slower date than previously.

“I learned from our Australian discussions that the fundamentals of the property market are still sound worldwide. It most cases it has only been the badly positioned, overpriced projects and homes that have ended up not selling. I found that there is real confidence that the upswing is not far off because Australia has now levelled off its interest rate.

“The Australian experience closely matches that of SA but we are in a better position than the Australians because our credit restrictions were applied timeously and our property investors have not been nearly as wild and irresponsible as those in Australia or, for that matter, the USA, Canada and the UK.

“As I have said before, and as Limnios said, now is a very good time to invest provided that you look for quality.”

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