Western Cape house prices are likely to remain level and there is little chance of "real" (i.e. inflation-beating) growth this year, says Dianne Brock, general manager of the Western Cape Institute of Estate Agents.
In the circumstances, says Brock, those many sellers who are still holding out for 2007 level prices, have got to "get realistic" - or take their homes off the market, as some have done.
"It is quite true, as some of our members have pointed out, that there will always be areas that buck the trend because, like the V & A Waterfront or Constantia, they have unique attractions and as their sellers are seldom distressed they can wait out down periods - but if you genuinely want to sell now, you have to consider seriously the comparative market analyses that the well qualified agents should produce."
The major "brake" on sales, said Brock, has not been the much-publicised lack of confidence in property on the contrary, various surveys have shown that all income groups understand the security and growth potential of property investment.
The real cause of the slow sales, said Brock, remains the banks inability or reluctance to grow their bond books. It is this, above all, she said, that hampers the growth of home ownership.
In these conditions, she added, those buyers with cash resources or able to qualify for bonds can call the shots and have considerable negotiating power.
We are, therefore, seeing an increase in buy-to-let investors but only slow growth in overall sales figures, she said, and if sellers genuinely want to sell their properties they have to price correctly. Holding onto the 20% per annum increases of yesteryear will almost certainly result in your being stuck with your home in perpetuity.
Positive signs for the year ahead, added Brock, include the fact that, in 2010, the government announced a one billion rand guarantee fund to promote access to loans. This fund will start its operations in April 2012, and will be managed by the National Housing Finance Corporation. The scheme will enable the banks to lend to people who earn more than R3 500 and less than R15 000 per month. Those who qualify will be able to obtain a subsidy of up to R83 000 from their provinces, to enable them to get housing finance from an accredited bank. This will encourage first time buyers to take that vital first step towards owning their own home.
There has already been a noticeable increase in first time buyers who now, according to the FNB survey, comprises 23% of the total in SA and we can look forward to further growth in this area, said Brock.
"These and other positive trends," said Brock, "are important because increased sales at the lower end of the market always have a push-up effect on the whole market. Those now buying into "affordable" units will in five or more years become the buyers of more expensive houses. We have a socially mobile society."