On Tuesday Standard Bank released their residential property gauge that showed the median house price in South Africa is now R 592 000 (figures for December 2008). Last year, 12 months ago, the median house price was around R 611 000. This is the first decline since 1996 and Standard Bank said that the property market is currently very fragile.
Even though there is the possibility of another 250 basis points cut in the interest rate, some economists are not very optimistic about the real estate market. The reason seems to be the high inflation rate and slow economic growth, and don’t forget, the world is in an economic crisis. All these things have a negative impact on ALL markets and investment vehicles, but I personally feel that no one actually knows what is going to happen.
An example of “No one really knows”:
- Standard Bank and First National Bank’s latest house price figures are more or less the same and shows a -1.7% drop in the average house price.
- ABSA’s figures shows positive growth of 1%, but their senior property analyst thinks prices will drop by -2.5% in 2009.
Okay, yes, they are more or less the same but there is still no consensus in the data. Surely data is data is data…
If you are a home owner you need to be positively realistic. Believe that the property market will turn, but also prepare for if it does not turn quick enough. If you are an investor you probably already know that now is the time to buy and negotiate a better selling price. There are a lot of investors buying property now at 10%-15% below asking price and sellers that are unrealistic with their prices will find their property not selling at all.
Well I always try to keep a positive, open mind so, go out there and get your hands on bargain property and do what ever you can to keep your current property. 2010 is coming, Barak Obama is president of the United States and we have a stringer democracy in our country now then ever. Thins WILL get better.
The figures between FNB, Absa, Std Bank, etc will never be the same. I never try to understand how they work out these stats, but I use it to try and see a trend. Each company has their own formula, but look at the trend.
With these figures we can see it is negative and it is going to get worse, but we know that. The reason is that these figures are based on sale 3-4 months back! We know what is going on in the property market, because we are living it real time.
So don’t let these figures get you down. We where expecting it.
Sellers are waking up to the fact that they need to be realistic about the selling price. With these headlines they will decrease their asking prices. You can see it in the new listings. People are selling their houses at 2007 prices. Have a look at your local Property Trader Mag. I know most people don’t even look at them anymore. Before they were taken within 2 days. Now they are collecting dust.
And you are right; this is the best time to buy!
Thx Colin. You always add real value to Yes2Property. Thanks again.