The Property Market Where To This Year?

The Property Market where to this year?

by

Matthew Lemmert

2012 was marginally less turbulent than the previous 2 years, despite forecasts to the contrary and in general turned out to be a solid year for the

property market

.

Business regained some confidence in line with the wider upswing and increased the pace of investment in new capacity. The government remained supportive of growth via an on-going fiscal stimulus, directed in particular towards investment in infrastructure and it kept the interest rates at its lowest in 39 years. Sound policies, a stronger Rand, modest consumer demand and spare industrial capacity helped to keep inflation in check.

So what does 2013 hold for the property industry in South Africa?

Over the past year, South Africa s financial institutions have marginally relaxed their lending criteria to the point where close on 50% of all home loan applications are approved. While the banks are now requiring higher deposits on bond applications, one can expect to see a greater risk appetite from the financial institutions.

Home prices are expected to continue their gradual rise, especially in the high demand areas and price brackets, while interest rates are expected to remain low, presenting buyers who have cash or qualify for mortgage finance with an opportunity to invest in a home at a good price.

Unfortunately South Africa also saw substantial labour unrest which is going to have a continued negative effect on business confidence. If the threat of retrenchments is carried out it will have severe consequences for the country s employment rate and security stability.

Furthermore the continued high debt-to-income ratio and a poor savings culture are still the major reasons why many South African home buyers struggle to obtain finance.South Africa has a domestic savings rate of 20 % of GDP while emerging markets like China have a rate of 50 % of GDP.

Other issues in the country such as the risk of electricity shortages are re-emerging (especially in 2013, if growth quickens), which will constrain energy-intensive sectors. Electricity prices are set to again raise sharply affecting property and infrastructure developments, and upward pressure will also come from costlier food and fuel on world markets.

On the one hand buying patterns will also start to be closely linked to the rising cost of living as buyers base their purchasing decisions on living costs more than before. If the price of petrol, electricity and the like, continue to rise buyers will buy functionally and be closer to schools, work and lifestyle attractions. But on the other hand consumer purchasing behaviour is constantly evolving.

It is becoming more and more evident that consumers are often basing their purchasing decisions on a set of values that focus on service levels and the quality of the product offering. Online shopping is featuring as a purchasing vehicle more so than ever before, which means today s consumers are exposed to a larger range and therefore have more choice.

Rainmaker Marketing was created to provide a sustained marketing solution for property developers throughout South Africa. Through unequalled marketing expertise and a creativeoutlook we change perceptions, build awareness and create leads. Selling is a lot easier from there.

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We are a young, energetic team with its finger on the pulse. In challenging market conditions you want a team that is quick to adapt to change and that is at the forefront of new trends and technological advancement. We get you ahead of the pack and keep you there.

http://www.propertymarketinggauteng.co.za/

Article Source:

ArticleRich.com