“Economic and property market recovery is likely to be steady and it will take time for the next upward growth cycle to take off to any meaningful degree. Consider your circumstances, and make the decision that is right for you.”
We head into the early half of 2019 with some good news in the form of improved economic growth, a further petrol price cut, and Moody’s keeping the sovereign credit rating and outlook stable with a gradual strengthening of institutions and increasing transparency, along with improved tourism figures.
The Seeff Property Group also welcomed the decision to keep the interest rate on hold as the right decision for the country. We need stability so that we can get on with rebuilding confidence and the economy.
While improving, overall confidence remains a drawback, and the next few months will likely remain subdued, both on the economic and property front. The May Election is expected to be a turning point, but for now, it remains largely all about the buyers.
It has remained business as usual for the ordinary “have to buy and have to sell” residential sector, generally in the price band up to R1m-R1.5m to around R3m depending on the area. These buyers and sellers need to transact for various reasons, and buoyed by the fairly benign interest rate, this sector will continue ticking over despite sentiment. Here, well-priced properties can still sell within a reasonable timeframe.
At the upper price ranges however, we will continue seeing discretionary buying with only those who really need to buy, transacting right now as they wait and watch how things unfold as the year progresses.
What does this mean for the year ahead? Given that the fundamentals in the property market will remain weak during the first half of the year with subdued demand, longer sales cycles and flat price growth, sellers, especially in the higher price categories, will need to make their prices attractive to catch the attention of buyers who have a lot more to choose from.
Those buying now in what is essentially a sideways market with flat prices, may well be considered the smart ones in a few years’ time as they will likely see good capital growth. There are no guarantees and we do not know when the economy and market will turn to a meaningful degree. Serious sellers should therefore perhaps take the opportunity to sell and capitalise on the demand, as they in turn can take advantage of the good buying conditions.
In the current market, the aptitude and investment profile of each individual will ascertain what and for how much they will buy. While it may be riskier now, you could ultimately see greater returns. On the other hand, it may well be a test for the prevailing wait-and-see attitude.
“Home is our story, so be sure to start your next chapter with us.” – Samuel Seeff