PROPERTY MARKET SLUMP????
What exactly is the state of the Property Market in South Africa?
Well, when assessing the health of any sector, you need to see what the people on the “frontline” have to say about it. Estate Agents are surely the vanguard of all others involved in the Property Market since they are the individuals who are out there on a daily basis initiating the deals that banks, investors and conveyancers usually only see after the deal has already been concluded.
It is therefore very insightful to read the internal memo by Lew Geffen that was leaked to the public. This memo is indeed a prophecy of doom wherein it is suggested that the property market is already down 15% and is likely to fall another 25% (i.e. a total fall of 40%) from the highs of last year.
On the opposite side of the spectrum is Dr Andrew Golding (CE of the Pam Golding Property Group). He has said in a post on Realestateweb that “While there are a range of factors at play which are currently affecting the residential property market in South Africa there is no need for widespread panic. These include global economic factors, national and political issues, a less positive sentiment, interest rates and the National Credit Act.
He goes on to say that "There is much speculation in regard to the current situation in the residential property market, and unfortunately generalisations being bandied about in the marketplace in regard to house prices are dangerous. The fact is it's not a 'one size fits all' scenario and there is no question that sales volumes have declined by some 20-30 percent year on year with an inevitable impact on house prices. However, the residential property market is sufficiently robust to deal with the changing dynamics and will continue to provide a reliable mechanism for the buying and selling of properties, albeit at lower volumes. Prices will adjust in line with supply and demand but fundamentally there are still valid reasons for residential homes to trade and there is certainly no need for panic selling, in fact quite the contrary.
It is interesting to note that others are also not sure.
If the Estate Agents are conflicted, then surely no one else can accurately assess the current state of the market. We are clearly in a downturn but the depth of it is unknown. All I can say is that the market always goes in cycles and that therefore if we are in a downturn then it is only a matter of time before it turns and I therefore agree with Dr Golding that it is definitely NOT time for panic selling.
The “not quite” Denny Crane
a.k.a. Gareth Shepperson
Well, when assessing the health of any sector, you need to see what the people on the “frontline” have to say about it. Estate Agents are surely the vanguard of all others involved in the Property Market since they are the individuals who are out there on a daily basis initiating the deals that banks, investors and conveyancers usually only see after the deal has already been concluded.
It is therefore very insightful to read the internal memo by Lew Geffen that was leaked to the public. This memo is indeed a prophecy of doom wherein it is suggested that the property market is already down 15% and is likely to fall another 25% (i.e. a total fall of 40%) from the highs of last year.
On the opposite side of the spectrum is Dr Andrew Golding (CE of the Pam Golding Property Group). He has said in a post on Realestateweb that “While there are a range of factors at play which are currently affecting the residential property market in South Africa there is no need for widespread panic. These include global economic factors, national and political issues, a less positive sentiment, interest rates and the National Credit Act.
He goes on to say that "There is much speculation in regard to the current situation in the residential property market, and unfortunately generalisations being bandied about in the marketplace in regard to house prices are dangerous. The fact is it's not a 'one size fits all' scenario and there is no question that sales volumes have declined by some 20-30 percent year on year with an inevitable impact on house prices. However, the residential property market is sufficiently robust to deal with the changing dynamics and will continue to provide a reliable mechanism for the buying and selling of properties, albeit at lower volumes. Prices will adjust in line with supply and demand but fundamentally there are still valid reasons for residential homes to trade and there is certainly no need for panic selling, in fact quite the contrary.
It is interesting to note that others are also not sure.
If the Estate Agents are conflicted, then surely no one else can accurately assess the current state of the market. We are clearly in a downturn but the depth of it is unknown. All I can say is that the market always goes in cycles and that therefore if we are in a downturn then it is only a matter of time before it turns and I therefore agree with Dr Golding that it is definitely NOT time for panic selling.
The “not quite” Denny Crane
a.k.a. Gareth Shepperson
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