Durban - This year has been a tumultuous one, from newly instated presidents to economic recessions, ever-rising fuel costs, interesting IT revelations from SARS and a few more Finance Ministers. As we tear off the last page of our 2018 calendars, the question for real estate investors as well as everyday citizens now becomes: What awaits us in 2019?
“Not surprisingly, a lot will hinge around the outcome of the 2019 elections,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
“Leading up to the elections, I predict that house price growth will be slow, somewhere in low single digit numbers, as people await to hear the results before making significant long-term investment commitments. Properties are likely, therefore, to stay on the market somewhat longer during the marketing process for the first and second quarters of 2018, especially those properties in the high-end and luxury market.”
“Moreover, I predict that there will be continued move to smaller, more manageable properties – such as sectional titles and estate-style living, lock-up and go type of homes, for example – as consumers continue to feel the pinch of rising inflation and cost of living. Subsequently, I also predict that there will be fewer cash sales and more bonded transactions as the increased cost of living will necessitate higher loan-to-value amounts on property transactions. Considering that the MPC has alluded to the possibility of a series of small interest rate increases throughout the year to counter inflation, it is therefore likely that the market will continue to favour buyers in 2019 as those who are unable to afford the higher instalments on their home loans decide to put their properties on the market,” Goslett adds.
“Consequently, 2019 will likely present the best opportunities to buy if you get in during the first half of the year. I anticipate reinvestment (both local and foreign) in the country post-election if the fight against corruption continues and tough decisions are made, which I do believe will happen. Greater stability should lead to consumer confidence and with that a more buoyant real estate market. I therefore predict that the market will turn a positive corner post-election, so if you wait too late to purchase, you may miss the upside,” Goslett advises.