I’ve read many news stories and blog posts spelling only doom and gloom for people buying and selling property in South Africa. But after pondering on owning property in South Africa, I’m glad to be here!
Should we believe all we read about the property for sale market crashing? Is it difficult to believe that some people have found a silver lining when it comes to buying or selling property in South Africa? The credit crunch has wrecked so much havoc, and while everyone is guessing what the future holds, most people are burying their savings under their mattresses, trying not to cry, and waiting for the storm to pass - I believe it’s a good time to lift our heads up high and be thankful we live in and own property in good old South Africa, once again!
There is a sea of information available but it contradicts itself and depending on who you’re listening to it either predicts the end of the world or at least the end of life as we know it. Banks say property prices are falling, they’re changing their credit criteria to survive while estate agents say that all has collapsed.
If you, like so many others, want to know what is really going on out there, we’ll be honest in saying we’re not 100% sure what the future holds but we can give our point of view and no, it’s not as bleak as the rest!
What we need to understand is that if banks say that property prices have fallen with 10 %, it may just as well mean that people have bought cheaper houses during that particular month. The inaccuracy of property statistics allows the data to be manipulated or rather presented in whatever way the data owner sees fit. Two of our major banks recently published statistics that imply that the average house price has fallen by R400k in the last year. The only way to analyse actual property price increases is to analyse specific property sales. In other words you need to compare a suburb with the same suburb, ideally you would want to compare the same property to be able to get a more accurate idea of what is happening. I’m not aware of anyone who has purchased a house a year ago and then sold it for R400 000 less this year.
As for agents being negative, their sentiment is measured by their commission margin as well as the number of sales made. If house prices increase by 10% but property sales reduce by 60% their market has collapsed, which is true but which does not necessarily mean that house prices have fallen.
So we need not look at the South African property market and weep, but wait there is more good news! Unlike other countries we still have leverage in reducing our interest rates which will put some relief on property owners monthly repayments but might also kick start the property market once interest rates have dropped sufficiently. Then, just as our interest rates are at their lowest levels the 2010 soccer world cup kicks off in June 2010. This will see a magnitude of investors flocking to our shores. They’ll view our life styles and think we are all super rich. They’ll then invest in our country, giving our economy another boost!
Furthermore, just to prove my point 104 properties listed on MyRoof.co.za were sold between 16 February2009 and 17 March 2009 as can be seen by clicking on the Property Sales table. During the same period 37 online offers were made on property for sale listed on MyRoof as can be seen by clicking on the Property Offers table. Yes, properties still sell, here, in South Africa in 2009!
If you own property or have property for sale in South Africa you are probably in one of the best countries in the world during this financial crisis - spread the word!
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