Leading economist forecasts sound future for property

Despite high crime levels and a weakening currency, South Africa has taken its place as one of the world’s top emerging economies with a property asset base that is likely to continue its upward value growth path for the next five or six years.

That’s according to Dr Iraj Abedian, director of Pan-African Investment and Research Services, who noted in a recent Johannesburg address that South Africa was increasingly being seen as a country with a more stable future. This, he attributed in part, to the success of its new economic policy, which had resulted in an improved risk rating that had lowered its cost of borrowing.

While there was no doubt that the weaker rand, together with the impact of the price of oil, remained major inflation drivers, Dr Abedian said people’s incomes and their ability to earn meant they could still service their mortgage and other debt. This was good news since property ownership was an important asset class in terms of stability and predictability, he believed.

His sentiments were supported by Realty 1 International Property Group CEO Mike Bester, who said that despite obvious challenges, business and consumer confidence in the country’s economy were at all-time highs. This was underpinned by ongoing activity in its property sector, where many economists predict value growth will average out at a healthy 12 or 13 percent for 2006.

Article from: www.rodneyhayter.com