Think we have it tough on the South African property scene right now? Well spare a thought for our UK counterparts where home prices have fallen about 15%, according to leading mortgage lender Halifax Bank - and the worst is yet to come.

“That’s not to suggest we are without problems of our own. But the fact is, our prices have fallen comparatively modestly by around 5% in real terms and the general consensus is that we may see a return to slight growth perhaps as early as the third quarter of this year,” says Gerhard Kotzé, CEO of the ERA South Africa property group,

“Clearly the South African property market has weathered the international credit storm relatively well compared with the ‘blood on the floor’ scenario of the UK market right now.

“It was evident to one of our people on a visit to the UK recently that the streets were full of ‘For Sale’ signs and the local press was full of tales of woe about the lack of buyers and complaints that the banks were simply not granting mortgages, but preferring to sit on the cash injections the government had provided as part of their financial rescue package.

“There were also predictions of rising unemployment, the threat of negative growth for the first time in decades, and reports that the pound had fallen by about 25% against the Euro. Pre-Christmas shopping was characterised by massive price reductions of up to 90% and household names like Woolworths disappeared off the retail map as the credit crunch bit.”

What is more, says Kotzé, prices for UK property remain inordinately high by our standards even after the slump. “What you pay for a pokey one-bed one-bath ‘upper and downer’ there would buy you a large multi-roomed home in SA and still leave you some change.

“And the property market in South Africa is ticking over, if not spectacularly, then at least steadily in many areas, although there is no denying that it is a buyers’ market, volumes are down and the lead time to a sale is now numbered in months rather than weeks or even days as it was at the height of the boom four years ago.”

Article from: www.era.co.za