MODERATE GROWTH FOR HOUSING MARKETS ACROSS THE GLOBE
National house price growth has been struggling to outpace inflation since early last year. However, the South African property market is not the only one that has experienced a slow period of growth. According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, property markets around the globe have also either recently emerged from a trying market or are starting to see signs of trouble on the horizon.
“As with any investment, returns are closely linked to the overall performance of the country’s economy, which means that it is entirely normal for property markets to experience highs and lows at different points in time. However, with real estate, the long-term growth rate often guarantees a high return on investment provided that the homeowners choose to weather the storms and sell no sooner than around the ten-year mark,” Goslett explains.
To encourage South Africans that we are by no means worse off than other markets across the globe, Goslett refers to the results of the State’s National Housing Report for August 2019 that revealed that home sales decreased by 4.2% compared to July 2019, and down 1.6% compared to August 2018. Leading the month-on-month sales percentage decrease were Miami, FL at -13.5%, Dover, NH at -13.1%, and Washington, D.C. at -10.3%. The Median Sales Prices also amounted to $263,000, which came down 3.6% from July 2019 and marked the steepest drop-off in the report’s history from July to August.
While some markets are only beginning to show signs of a dip, others are beginning to show signs of recovery. Generalising across all Australian markets, Josh Davoren, Regional Director of RE/MAX Australia explains that their market is only just emerging from a property downturn that commenced around 18 months ago due to a variety of fiscal, political and regulatory factors.
“Sydney and Melbourne were the hardest hit. However, by the end of this year, the market is expected to stabilise – we are already seeing this on the east coast – and moderate growth should follow in 2020. Our Australian scene is one of falling interest rates and rising consumer confidence. The banks are lending, and things have settled on political and taxation fronts. This means that many property markets across the country are heading in a good direction now,” says Davoren.
Similarly, the results of the South African RE/MAX National Housing Report for Q3 2019 reveal that we might be on our way to recovery in 2020 as well. “The number of transfers (both bonded and unbonded) recorded at the Deeds Office between July and September increased by 17% from last year, and by 8% from Q2 2019. There was also a 24% increase in the number of bonds registered since Q3 2018. What’s more, the current national median price of a freehold home has grown by 6.5% on the median asking price for Q3 2018. This all bodes well for overall market recovery going forward. I therefore remain hopeful that the property market will continue to strengthen over time,” Goslett concludes.