Yesterday, Wednesday August 3, South Africans voted in the municipal elections to decide which party will run their municipal district for the next five years.
Regional director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says he has been asked on a few occasions what influence the elections have had on the property market over the past few months and what we can expect afterwards.
“To be honest this isn’t an easy question to answer, considering who of us can truly say for certain what will happen in the future. However, I can offer my opinion on where I see the market going, based on my experience working within the property industry,” says Mr Goslett.
“It would certainly seem that people have been hesitant to invest in property leading up to the elections, with many potential buyers adopting a wait-and-see approach. Many are holding back to see where things are going from a political perspective, however, this is not the only factor that is having an impact.”
He adds that there are several things happening from an economic standpoint and many consumers are nervous about whether the market will experience a dip down in the near future.
“That said, I think that after the elections there is likely to be resurgence in the property market and a bit of an uptick as consumer confidence returns and more buyers get ready to get back into market,” says Mr Goslett.
He notes that many within the real estate industry have coined the months leading up to this point as a slowdown in the market. However, says Mr Goslett, he would prefer to look at it in another way. “While the numbers in the property market do reflect a slowdown – there are buyers in the market and there is a certain amount of available stock.
“Nevertheless, we have reached the point where buyers are not prepared to pay the prices at which the stock is currently being marketed, putting the market in a state of flux,” he says.
“Over the next few months, as home prices adjust, and they will have to adjust downwards if sellers want to sell their properties, you will see the market begin to flow again. While there are issues around banks’ lending, or rumours that the banks are tightening up their lending criteria, I don’t think that is as much of an issue as buyers just not wanting to pay inflated home prices.”
Mr Goslett believes the market is currently in a transition period with momentum shifting towards the buyer. The shift will cause property prices to stagnant for the time being.
“Interesting times lie ahead for the country and the property market. Those who are prepared and ready will be able to make the most of the times ahead,” Mr Goslett concludes.