Do you have real estate for sale in South Africa? Then you will find the information given here very useful as we discuss what 2016 has in store for you. Generally, the most important factor that decides whether the demand for property is high or not is the number of households in a given society.
The average price of homes in a city or country is a function of the total housing stock and the amount of money available on an average with the households that can buy the houses.
Generally, there are three things that are very important, that dictate whether your home gets sold or not, and the price for which it can be sold for….
Demographics – denoted by the number of households.
Affluence – denotes the speed of economic growth and incomes.
Housing supply - denotes the number of housing units available in a country or city.
South Africa is one of the few countries where all three factors are positive. South Africa has a fast growing population, which is getting more affluent every year, and has limited housing supply – so naturally, this means higher house prices.
Indeed, in South Africa, the growth of house prices is higher than the general inflation rate, which is excellent news for you if you have a house for sale in South Africa.
South Africa’s residential property market has been outperforming the general economy for years now. While property prices have risen by 7 percent in 2015, the country’s GDP only grew at 1.5% or 2%. South Africa’s real estate prices have been practically insulated from what’s happening in the rest of the economy.
This has been largely due to the surplus of buyers in South Africa and the serious shortage of housing stock in most areas, especially in Johannesburg, Durban and Pretoria. This also means that it doesn’t take long for a home to get sold, as long as the paperwork is intact.
Property prices are expected to be high in South Africa for the next few years as well, as long as the economy remains fairly stable and the government doesn’t mess with the interest rates too much. There could be an interest rate hike in 2016, but we don’t expect it to be anything drastic.
The concern in South Africa is more about the lack of confidence in the general economy. The real estate market is doing well, as it is. In fact, at the high end of the real estate market, prices have never been higher. If you happen to have a house in a Cape Town suburb, you should expect to get a really good price for it, comparable to what you would get in the USA or the UK.
What’s worrying though is the lack of activity in the high end market. As the CEO of Seeff, one of Southern Africa's biggest real estate companies says, “The people do have the finances, but at that level they are either looking to purchase in Cape Town or look to take some money offshore, which does not bode well for us,” he said.
Finally, there are over 400,000 South Africans living in the UK. South Africans are among the biggest buyers of houses in the UK. Unfortunately, while there are a lot of South Africans buying property in the UK and other western countries, there hasn’t been a movement in the opposite direction – there just aren’t too many international investors buying homes in South Africa.
One way to boost not just the South African economy, but also the residential housing market is the ease up the visa regulations and make it easier for foreign investors to buy property in South Africa. There’s no reason why South Africa cannot make itself a more attractive destination for international investors.