Property Market Remains Buoyant Due To 2016 Trends
Category News
Whilst South Africa’s current economic situation may be deemed as somewhat precarious, the interest rate hike will prove to be opportunistic for various aspects of the property market. Certain sectors of the market will prosper in the face of the interest rate spike, thereby restoring investor confidence. Here are a few factors which will see the property market remain buoyant in 2016:
High Demand For Rental Property
Slow economic times and an increased interest rate have had a ripple effect, leading to stricter lending criteria. It is now more difficult for the average South African to acquire a mortgage as consumers must comply with stringent requirements. These factors have led to the rental market becoming a more viable and practical option for an increasing number of South Africans. In fact, in the City of Johannesburg trends indicate that demand for rental property has shown admirable increases owing to higher salaries and lower rental costs. This proves to be opportunistic for the rental market as the demand for rental property is increasing gradually. Buy to let property investors will enjoy a steady surge of tenants looking to lease properties, making it a prosperous time to invest as high demand may also constitute higher monthly rentals.
Certain Areas Will Continue To Thrive
“Location, location, location” applies directly to the property market as most consumers, whether looking to rent or buy, will allow location to heavily influence their decision. According to property experts, the interest rate increase will have little effect on certain areas in South Africa. Metropolitan areas which offer the balance of a “work, live, play” lifestyle, such as: Sandton, Umhlanga and City Bowl will continue to see a continuous demand. It is becoming increasingly evident that South Africans are choosing to be closer to the hussle and bussle of the city and these high density areas will thrive, despite harsh economic times.
Urbanisation and Densification
Densification is becoming a prominent trend in the South African property market as more and more people are choosing to live in densely populated areas. South African cities are expanding rapidly as a result of urbanisation as there is a significant demand for properties closer to the city. These residential hubs generally tend to offer a range of benefits, such as: close proximity to transport, shops, restaurants and entertainment. South Africans are sacrificing space over convenience and an increasing number of residential estates are being developed in these metropolitan hubs, in order to keep up with this trend. An example of this would be the Umhlanga area, which has seen tremendous growth over the past decade, including a surge in residential estates surrounding the central business node.
In addition to this, sectional title housing offers a myriad of financial benefits, such as low costs on maintenance and upkeep. Affordability is key during harsh economic times and with inflation on the rise, these financial benefits prove highly advantageous on those who are feeling the pinch of an economic slowdown. The convenience of a lock up and go property, within a secure estate is highly appealing to many South Africans and these properties will remain sought after, regardless of the interest rate hike.
Property trends such as densification, coupled with a high demand for rental property will ensure that the housing market remains robust in 2016. However, during the current economic hardship, consumers need to be vigilant when searching for a property. Therefore, browse our website and refine your property search in order to find the best deals for your budget.
Author: Dormehl Property Group
