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According to Dr Andrew Golding, these are the eight trends bound to take place within the property market in 2017.
Dr Andrew Golding, Chief Executive of the Pam Golding Property (PGP) group, revealed what he believes will be the biggest trends in the property market in 2017.
He commented on the state of the property market in South Africa, "To say that it’s been a tumultuous year for the planet is definitely an understatement. Yet, in the face of a sluggish and uncertain domestic and global growth environment, and ongoing socio-political challenges, the residential property market in South Africa continues to exhibit extraordinary resilience. It remains one of the few bright spots in an otherwise relatively lacklustre economy". Golding attributes the strength of the housing market to the "continued vibrancy of the country’s major metro areas. This coupled with an ever growing preference for property as a class asset at a time of extreme financial market volatility".
Top 8 Property Market Trends For 2017
1. Location Decides When To Sell, Not The Economy
"Despite many thinking the price of property lies in the hands of the economy, it is in fact the location that matters the most", says Golding.Golding cited recent research released by Lightstone, when he concluded that the suburb that a property is located in is more important than the state of the economy. This determines how long a property will usually take to sell.
2. Western Cape Still The Best Investment
The Western Cape is known for its huge appeal to investors and holidaymakers alike. As a result, it continuously outperforms other provinces. The price of houses in the province has risen by over 10.35%, with “no indication of it slowing down”.3. Sectional Title Properties Continue To Outperform Freehold Homes
“One possible explanation for Gauteng’s relative price underperformance is the fact that the region is better able to meet growing demand for new housing”, says Golding. “Unlike Cape Town, where the geographic limits created by the coastline and mountains hamper the creation of new housing stock, creating a persistent shortage of stock in prime areas, Gauteng has been able to expand outwards in order to meet housing demand”.Secure estates such as Steyn City and Dainfern remain resilient and popular even in tougher trading conditions. This, while we are noting an increase in the number of renovations and rebuilds in some of the more established estates. With its convenient airport access, avoiding considerable traffic congestion, Lanseria is experiencing significant land sales. As a result, and due to their popularity with first-time buyers, the company has seen a continued preference for sectional title properties over free-standing ones.
4. Rapid Development Across Tshwane
Although house price inflation in Pretoria has slowed in the past few months, development across the Tshwane municipal region continues at a rapid pace. Many residential areas retain highly active property markets. Easy access to amenities and a secure lifestyle are of prime importance to residents, which helps explain why townhouse complexes, apartments, and homes within security and golf estates are in particularly high demand in much of the region. The rental market has continued to do well and has benefitted from an ongoing demand from corporate, embassy, and foreign mission staff. Pam Golding Properties in the Pretoria region has had a record year enjoying a 49% increase in turnover and a 42% increase in unit sales over 2015. To meet the expected future demand for accommodation within Menlyn, one of the fastest growing regions in Gauteng is the new luxury high-rise apartment developments. These include Menlyn Maine Towers, the impressive residential component of the ground-breaking Menlyn Maine mixed-use development, and The Regency. Both are proving popular and units have been rapidly sold off-plan. Investors are being attracted by the cosmopolitan ‘work-play’ urban lifestyle that is now on offer at these developments5. Gautrain Extension To Spark New Growth Nodes
The Gautrain Management Agency is planning to extend the rail route by 150km. The Gautrain could soon extend its travelling routes to Soweto, Mamelodi, and the West of Johannesburg. Golding anticipates that the extension to the west of Johannesburg will have a similar impact on the local property market as was experienced in Sandton and Rosebank, with some big corporates opting to relocate there.6. Robust Activity On KwaZulu-Natal North Coast Prompts Housing Rebound
In contrast to the cooling house price inflation in both the Western Cape and Gauteng, KwaZulu-Natal (KZN) is experiencing a modest rebound. With growth in prices rallying from 5.4% in late-2015 to a level of 7.5% in September 2016. There is no sign, as yet, that the rebound in prices is losing momentum. Housing demand appears to be particularly buoyant along the northern KZN coastline, with buyers showing a strong preference for properties within secure estates. With its prime location and beautiful beaches, there is significant demand in uMhlanga. Numerous new secure estates and beachfront complexes are proving to be extremely popular. New estates like Izinga, Hawaan Forest, and beachfront complexes, such as the Oceans and the Pearls, are experiencing high demand.7. Major Investments Behind Soaring North Coast Housing Market
Official statistics show that total international arrivals have risen by 60% since King Shaka opened in 2010, due to direct international flights. To extend the transport network with the TradePort, local authorities are planning a rapid rail system. This will connect King Shaka with Durban, Pietermaritzburg, and Richards Bay. The increase in economic activity and improved employment opportunities, generated by developments at King Shaka and Dube TradePort, are undoubtedly contributing to the revival in the property market in the region.8. Eastern Cape Rallies As Buyers Relocate To South Africa’s Coastline
"During the past five years, freehold properties have risen by an average of 22.1% in Port Elizabeth and 29.2% in East London", says Golding.The massive new wave of economic investment, coupled with a new local government, suggests that the Eastern Cape housing market will experience a renewed bout of growth in the months ahead.