Further signs of a residential property recovery now becoming evident
A fortnight ago Lanice Steward, MD of Anne Porter Knight Frank, said that she sees signs of the Cape residential property market recovering albeit slowly in 2009.
That statement appears to have been vindicated by recent figures from the national bond originators, ooba, which show that average house prices year on year for September have risen by 3 to 3,5% from R768,557 to R794,977.
One swallow, said Steward, does not make a summer but I expect that, provided we have no more major financial fallouts, we will have similar figures for the next few months. The market is now breathing a little easier even though a full recovery will almost certainly take another year.
The 3% rise is not yet, said Steward, in line with inflation but it represents a highly significant change in the market and a revival of confidence.
Particularly significant, said Steward, is the fact that deposits are now 50 to 60% up on last year. This, she said, indicates that the National Credit Act is having the desired effect of ensuring investors take less risk and are less reckless in their buying.
Currently, added Steward, the number of homes sold per month is still about half what it was in the boom times of 2006/07 but, she said, even here there are now signs that an upswing is about to begin.
In the current economic conditions, she said, one would, as in all the UK and USA, expect to see a flood of houses coming up for sale but this has not happened, except in a few areas. Most Capetonian homeowners, it would appear, are not as cash strapped as the Gauteng sellers, to have to sell they are simply sitting tight.
This, too, said Steward, is a good sign another reason for confidence in the residential sector.
The good news is that the banks, although cautious, are still granting bonds and have the necessary liquidity to do so. However bad the whole current situation is, said Steward, it is still a big improvement on the early 1980s scenario when bonds were almost unobtainable.
Article by: www.rawson.co.za