Real Estate News - What to expect in 2006
The property boom is over but there are still juicy returns to be had by astute buyers in 2006.
That was the message from Pam Golding Property (PGP) group chief executive Dr Andrew Golding this week when he reported on what has been another bumper year for the real estate group.
His organisation is heading towards property sales of R14bn for this financial year. The recent sale of a R100m-plus Noordhoek, Cape Town, residence believed to be the highest-ever sum fetched for a residential property in the country has helped PGP get closer to its annual target.
Its no longer a sellers market, with a significant drop-off in the number of transactions.
The market has changed. Its turned significantly from crazy exuberance back to the normal cyclical, seasonal pattern, which does wax and wane, said Golding.
However, prices are still heading upwards, he said. Some areas, like Durbanville in Cape Town, have played catch-up recently.
While the market has now experienced a slowdown in some segments, it reflects steady, sustainable growth ranging from 12 15%, said Golding.
South Africa will not be immune to a global property bubble bursting, but the country is minute in the world scheme of things, he commented.
A major factor driving the residential market is the emerging middle class in South Africa. There is a significant shortage of homes all around the world and particularly in South Africa, he noted.
An interest rate increase is a possibility, but it should not affect the stability of the property market, said Golding.
We believe the market during the forthcoming year will be characterised by similar conditions to those which we have experienced during the past six months, with fluctuating performance in different areas.
The property boom has sparked a proliferation of estate agencies around the country not least of all in the dusty Karoo where PGP now has 19 offices and is achieving good sales.
PGP has also expanded its operation in Gauteng.
The 2010 soccer world cup is already having spin-offs, according to Golding, with three homes at Dainfern Golf Estate sold to parties involved in the tournaments activities.
Golding pointed out that interest is growing, again, among South Africans for London, United Kingdom, properties.
Sales tailed off significantly as the rand appreciated, but this year PGP expects to conclude at least 150 sales to South Africans.
Article from: www.moneyweb.co.za