The residential market is going to move sideways in 2020 with real prices declining driven by a surplus of stock on the market and continued buyer caution. Similar conditions will prevail in the rental market for lessors who will need to have a healthy dose of market realism.
I predict that, provided no further threats to our economic growth occur during the year ahead, the local property market will remain more or less stable in 2020, reflecting marginally higher rates of house price growth and higher numbers of transactions. I believe the luxury market will continue to feel the pinch within this tight economy and the majority of transactions will continue to fall within the affordable price ranges.
The South African property market continues to show slow but steady growth in what will become an extended period of low demand and minimal market activity. The market will take time to recover fully from this contraction, and buyers are still in a position of strength with supply outweighing demand for now.
The upside to the market, is that 2020 kicks off as one of the best times to buy. Sellers will now be ready to sell, and buyers can negotiate strongly. Although Seeff expects transaction volumes to increase, it will be largely below R1.8-million (R3-million in some areas), supported by the low borrowing costs and favourable mortgage lending conditions. Prices will remain flat and sellers will need to price conservatively or risk not attracting buyer interest.
As you can see, even the experts are confused!
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