South Africa’s residential property market is expected to remain buoyant in 2003 after experiencing strong gains in 2002, boosted by the strengthening of the rand, expected income tax relief in February’s national budget, and most importantly, forecast declines in local interest rates, according to Andrew Golding, CEO of the Pam Golding Property group (PGP).
“We are extremely positive about the forthcoming year 2003 and anticipate that the strong demand for residential property will continue,” Golding said.
“The stronger rand coupled with anticipated tax relief–and hopefully a reduction in interest rates– is expected to result in increased investor confidence in the property market and continued buoyancy.”
Golding said that despite interest rate increases totaling four percent implemented in 2002, the local residential property market remained buoyant across all areas of the country and continued to reflect growing consumer confidence in property as a sound and stable investment over the medium- and long-term.
Capital values had risen by 10% to 25% over the past year, with sound growth also being recorded in areas where prices had been lagging in previous years, he added.
“The year was characterised by an exceptionally strong demand for property- -which in many areas outstripped supply, an ever-increasing demand for homes from black buyers, as well as increased foreign investment,” he said.
“Realistically priced properties continued to sell swiftly in a marketplace where buyers generally have become more sophisticated and well-informed, particularly with regard to market-related pricing.”
Golding revealed that the PGP group’s residential sales for November 2002 were in excess of R600-million, the second highest turnover ever achieved in any month apart from February 2002, when they were close to R700-million.
Total sales over the past year had been over budget across all areas of the company’s operations, and PGP was well on track to achieve a record total turnover in excess of R6-billion for the financial year ended February 2003, particularly given that the summer months beginning in January were historically the company’s busiest sales period.
By contrast, as an investment South Africa’s property sector did not record a strong performance in 2002, hit by the high level of interest rates, and is not expected to improve in 2003. Many listed property funds posted flat earnings last year and are expecting only modest growth in 2003, hopefully picking up again in 2004 as lower interest rates boost business confidence. – I-Net Bridge