What does 2015 hold for the property market?
Tug of War market Forces.
We peer into our little Crystal Ball to see what 2015 may hold for the Property Market. It’s difficult to say when last we experienced such strongly conflicting market factors at play as we see at the beginning of 2015. How 2015 ultimately pans out will depend on which of these opposing market forces win the tug-of-war.
The Market Factors.
It’s fair to say that 2014 did see some improvement in the property market with increasing demand leading to stock shortages resulting in a bit of a sellers market and fairly moderate price increases although we have not yet experienced pre 2008 sales figures.
2015 is unique from the point of view that we see very strong international factors that would normally lead to increased demand for property, but yet we see equally opposing local factors.
Oil prices are currently at their lowest levels in many years around $48 a barrel and we have already seen the effects of this with some significant reductions in the petrol price with more sizable decreases predicted in the near future, especially with the recent strengthening of the Rand, this is aiding in keeping inflation in check and within the Reserve Banks 3-6% target range leading economists to predict possible interest rate decreases, or at least no immediate increases on the current 5.75% rate.
Despite a slight weakening of the Euro South African Property is still a great investment for foreign buyers with certain areas reporting an increase in demand in the higher price ranges.
Unfortunately on the local front we have some “self inflicted” challenges with the IMF again downgrading our projected GDP growth from 2.3% to 2.1%, primarily as a result of a seriously restricted Power Supply combined with labour issues and unemployment, making foreign investment and local business growth more challenging. In fact while writing this article the lights have just gone out.
Despite the negatives we are looking forward to and expecting 2015 to be a good year as more first time buyers who may have delayed purchasing subsequent to the 2008 crash are now in a better position to enter the market.