Patience is needed as we wait for sentiment to improve to such an extent where we can once again look forward to some meaningful economic and property market growth. That is the word from Samuel Seeff, chairman of the Seeff Property Group who says that it is sentiment more than anything else that is currently holding back the economy and market.
2018 has, by all accounts been a challenging year for the economy and property market. Overall, while it remained business as usual for the sub-R1.5 million sector, there was a notable weakening in demand above the R3 million to R5 million price bands, says Seeff.
A weak economic climate, political noise and property ownership concerns impacted on the market to a notable degree and conditions shifted largely in favour of buyers. Price growth flattened, although with no real price devaluation evident as yet, he adds. While down on the highs of recent years, Seeff stressed that the market has not reached anywhere near the lows of the post-2008 period.
Looking to 2019, we expect to start the year on much the same foot and will need to be patient for a little while longer as the market is likely to remain fairly flat for the first few months for a number of reasons.
The early part of 2019 will be dominated by the lead up to the May elections and it is potentially going to be a rather noisy period. Seeff says that once the elections are out of the way and we get a positive result that reinforces a mandate to President Ramaphosa to continue with his reforms, we will see this translate into more positive sentiment, so critical for the economy and property market.
Seeff says there is every reason to feel positive that the economy should start lifting towards mid-2019. The ratings agencies have kept a stable outlook and President Ramaphosa has demonstrated his commitment to rooting out corruption and maladministration and returning to good governance. His recent investment drive successes add further to the positive outlook.
Seeff cautions consumer to guard against overspending over the festive season, especially on credit as this will likely put further pressure on household budgets in the new year and leave many unable to meet their monthly commitments including housing bonds and rents.
Consumers and home owners should also be prepared for further potential interest rate hikes next year, but highlights that the rate is still at some of the best levels in decades.
While the early part of the year will now doubt bring a few challenges, we nonetheless expect the economy and property market to normalise and perhaps start its next upward growth cycle by around mid-year. The Seeff Property Group is certainly looking forward to a better 2019, says Seeff.
The latest FNB and ABSA property data shows that the property market indicators continue to deteriorate with properties staying on the market for longer and an increasing number of sellers having to cut their asking price. Conditions remains weighted in favour of buyers and will remain so into the early part of 2019. Sellers will therefore have to continue keeping their price expectations in check.
Buyers though should not wait too long. All economies and property markets go through cycles of ups and downs and many will tell you if only they had bought at a particular time. It is a good time to buy, provided you are able to find the right property at the right price.
by Seeff Head Office