Golding expects resilient housing market

File picture: James White

File picture: James White

Published Nov 6, 2015

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Johannesburg - South Africa’s housing market would continue to be resilient, despite the likelihood of the national economy continuing to flounder, Pam Golding Property (PGP) group chief executive Andrew Golding said yesterday.

Golding said this was suggested by the rapid growth in the population and consequent housing demand, together with the ongoing shortage of new housing.

He added that a number of regional and suburban housing markets were likely to enjoy vibrant growth rates, reflecting the migration of people between provinces, the level of economic activity in the metro areas and the extent to which different metros were able to meet the housing demands of their local populations.

“Given the growing gap between the steady increase in the number of households formed in South Africa and the market slowdown in the provision of new housing stock by both government and the private sector, the supply of land and/or housing stock is likely to remain supportive of the local housing market for the foreseeable future,” Golding said.

Golding said the population was growing at a pace of about 800 000 people a year and South Africans were also moving at a rapid pace within the country.

He said Gauteng’s population, for instance, was estimated to have increased by 60 percent between 1996 and last year and the population of the Western Cape by 50 percent while the Free State and Eastern Cape lost about 20 percent of their residents.

He said growing affluence in South Africa’s metro regions, even as overall national growth continued to lose momentum, explained why house price inflation in major metros such as Cape Town, Johannesburg and Pretoria was still accelerating.

More households

He said the growth in South Africa’s population each year together with a gradual decline in the number of people per household from four per household in 1996 to 3.4 per household in 2011 meant that the number of households was increasing at an even faster pace than the population.

Golding said PGP’s group turnover had grown by 10 percent to more than R11 billion in the first seven months of its financial year and the number of units sold had risen by 7 percent in the same period.

“This puts us on track to achieve around R19bn in residential sales in the year to end February 2016,” he said.

Golding said the group had in the past 12 months increased the number of units sold in the R20 million to R50m price band by 33 percent, by 13 percent in the band from R10m to R20m and 20 percent in the price band between R5m and R10m.

The number of units PGP had sold in the R3m to R5m and R1m to R3m price bands had both increased by 12 percent, he said.

“In line with national demand, the bulk of our sales are in the price band up to R5m, with 43.6 percent between R1m and R3m,” he said.

Golding said sales to international buyers remained low at about 1 percent for South Africa as a whole and 3 percent for PGP for the past 12 months.

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