Where South African property is heading in 2018

We’re almost halfway through 2018 and defining trends in real estate will be setting up the stage for a lot more developments in the South African property market in the months to come. But, what can homebuyers in Gauteng expect going further into this year?

While property sales in Cape Town have been slanting upward the last quarter or two, Johannesburg experienced a slowdown this year. According to Adrian Goslett, CEO of RE/MAX of Southern Africa, banks have been tightening their purse strings and the deeds office failed to keep pace with property transfers, which resulted in fewer transfers. Even though there were lots of investment opportunities available, the slump in the property market can also be attributed to buyers and sellers not agreeing on a price.

“Even with a slower market, Gauteng still accounted for the lion’s share of property transactions during this year. Johannesburg will continue to be the country’s economic hub with almost 45% of RE/MAX sales emanating from Gauteng – albeit in tough times.”

Goslett says that the recent downgrade by a major credit rating agency places more weight on the property market. With the weak economic backdrop, bonds are likely to become even more out of reach. “It will cost more for the government to borrow money, which in turn will have a knock-on effect on the consumer. Financial institutions will need to hold more money in reserve, which will make it more difficult to obtain credit, and the credit that is granted will come at a higher cost,” he explains. “A marginal mitigating factor is that to some degree financial institutions have already made provision and priced in the effects that a downgrade would have on credit costs.”

No matter what your property goals are this year – be it looking for property for sale or rent in Johannesburg – these insights are worth considering as you head into the third and fourth quarter of 2018.