And now for the good news about SA property
South African property owners have had a veritable cornucopia of good news in recent weeks, starting with the unexpected announcement by the South African Reserve Bank that it would cut interest rates slightly, helping to ease the bond repayment burden of hard pressed households.
That was followed by the SARBs Leading Business Cycle indicator which showed the economys growth has accelerated. Then came the announcement, also by the SARB, that there was growth in real household disposable income, all of which is very positive for residential property demand according to John Loos, Property Strategist at FNB Home Loans.
But wait, it gets better says the CEO of the ERA South Africa property group, Gerhard Kotzé. We now learn that South Africa had the best performing housing market in the world over the longer term according to figures from the authoritative Economist magazine.
The publications Global House Price Index shows that SA house prices rose by a cumulative 418% over the past 12 years (1997-2009). That far outstrips any of the other 20 housing markets tracked by the index. The next best performers were Australia, Britain and Spain with growth of 181 %, 175% and 167% respectively.
The worst performing housing market was Japan with an actual negative growth of 36%. Other countries at the bottom of the performance stakes were Hong Kong (-20%), Singapore (-4%) and Switzerland (+28%).
More importantly, the Economist reports that South Africa is one of only a few countries in the world that has house prices back at their peak levels of 2008.
The South African market has therefore surprised on the upside as the economists like to put it. Moreover, the data suggests that the scene is now set for a further recovery indeed the FNB reports that the average price of a South African house accelerated to R764 912 in January this year or 1, 2% higher than the average recorded at the height of the boom in 2008.
Home owners still hard pressed to meet their mortgage payments will look askance at these numbers. However for those who have managed their financial affairs well, its apparent that property remains an excellent investment.
However in keeping with the old adage that It is not timing the market that counts, but time in the market, then home buyers should continue to buy in on the basis of sound investment principles. Its certainly not the time to start speculating, adds Kotzé.
Article by: www.era.co.za