Real Estate Investor Magazine South Africa November 2014 | Page 23

REI RESIDENTIAL
REI Residential

Smaller houses showing the strongest growth

A

ccording to the latest Rode’s Report on the SA Property Market (2014:3) smaller houses
are showing the strongest growth. The report analyses FNB’s house price indices for
different sizes of full- and sectional-title homes and finds that the prices of smaller
houses are not only accelerating faster but are also showing stronger growth relative to
larger houses.
Growth in FNB house prices
Sectional-title with 3, 2 and fewer than 2 bedrooms

Expert Q&A
Splendid
summer for
sellers

Samuel Seeff
Chairman
Seeff
Q As we go into the summer season,
what is the mood in the market?

Source of data: FNB

Erwin Rode, property economist and CEO of Rode & Associates, explains: “The prevailing
low economic growth environment and the uncertainty it brings to household finances, as
well as tight credit criteria of banks, might be forcing buyers to scale down - especially
first-time buyers.”
Nevertheless, over the past year, a slight softening in the credit standards of banks
seems to have buoyed house prices in general, which explains why they are, in general,
again showing growth slightly in excess of inflation. However, headwinds in the path of
house prices remain, for example weak growth in formal employment, waning growth
in household after-tax incomes, still-high levels of household debt and the possibility
of further interest rate hikes. The consumer is under unrelenting stress, confirmed by
residential rentals that, according to Rode’s research, have been growing at about half
the inflation rate.
Myles Wakefield
CEO
Wakefields Real Estate
A market price by definition is the one for which a willing
buyer will pay a willing seller at a specific time. Buyers
purchase on comparison and are typically savvy about the
market trends in their areas of interest, so genuine buyers
will overlook over-priced properties.
Adrian Goslett
CEO
RE/MAX of Southern Africa
Demand for efficient homes is a trend that has seen much
growth as more buyers look for property with features
that save on energy costs and reduce their environmental
impact. Green features are high on the must-have list due
to rising utilities costs and growing environmental concerns.
www.reimag.co.za

There is a significantly better mood in the
property market this year with sales activity now
at the best levels since the 2007/8 down-turn,
not only in the mid-market sector, but also at
the top end of the market. Momentum started
building early last year and activity continues
strong month-on-month.
Q What does this mean for the
property mar