With some global housing “bubble talk” starting up again, where does South Africa’s market stand?
During October, Dallas Federal Reserve President Richard Fisher expressed his concerns that another housing “bubble” was developing in the United States, while similar concerns have recently been expressed in other countries like the UK as well. John Loos of FNB Household and Property Sector Strategist states: Given that South Africa is a very open economy, and strongly tracks the global economic cycle, it is important not to ignore such global signs, and to ask the question as to whether such a situation is possibly developing here at home too. Fortunately, we cannot see signs of “over-exuberant” behaviour in the residential market as yet.
“All South African property owners need to be fully aware of the economic situation, however with our strict banking policies, we are better protected than many other countries. “We have also not seen the same kind of house price increases as seen in other parts of the world and our prices remain conservatively priced in comparison with international prices” says Craig Hutchison, CEO of Engel & Völkers Southern Africa. Home owners are warned that they should restrict their housekeeping expenditure and rather pay any spare cash into their mortgages, especially over this festive season.
In South Africa, the property market appears very stable and balanced and so, with our current low interest rates, buyers should be benefiting and exploiting this situation, as it makes financial sense now to buy either a first, or second property. Home purchasers can be confident that to purchase property now with our current interest rates, will be an asset to their portfolio.
“We all have a good idea of the maximum amount that we can afford to spend monthly on a bond, and this fact, together with the right property, will let you enjoy your new home without undue financial stress. Just be cautious of being extravagant and stay within a budget. Our own in-house financial services team will assist you in establishing the maximum bond that the bank will grant you, so that you can plan for 2014” added Sandy Reddy, Head of EV Finance.
As quoted by FNB, the year-on-year house price growth, although relatively low, is positive news for both the purchaser and the seller. Contact one of our Engel & Völkers offices around the country and they will gladly provide you with professional service and assistance with your decision-making.
For a confidential analysis and assistance with your finance application on the details below:
EVFinance • 0860 22 7777 or 079 500 1954 or e-mail info@EVFinance.co.za. Alternatively sms EV FIN to 33903 with your name or e-mail address, and we will contact you. (SMS charged at R1,50. No free minutes apply.)