SOUTH AFRICA: Property market poised to improve.
In the hopes of restoring confidence in the South African real estate market, Lightstone Property released its 2019 Property Forecast earlier today. While the forecast excludes a large portion of the November and December sales that are still being processed at the Deeds Office, the forecast reflects a hopeful outlook for the year ahead.
According to Lightstone’s forecast, GDP will grow between 0.75% and 1.5%, and CPI will range between 4.0% - 5.5% for 2019. Lightstone’s data scientists modelled three different scenarios for house price growth for the year. In the high road scenario, Lightstone predicts that house prices will grow by 4,5%. This drops to 3% in the mid-road scenario, and 2% in the low road scenario.
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Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that if we were to end the year in the high road scenario, and CPI falls to the lower end of the 4.0% - 5.5% bracket predicted, then we will have exited the cycle of house price decline that has characterised the South African property market for some time now.
What’s more, Paul-Roux de Kock (Analytics Director at Lightstone) predicts a positive economic turnaround post-election, which is likely to stimulate the property market. As Goslett predicted last year, the real estate market is likely to see an uptake post-election owing to the clarity and stability that follows such an event. “Many choose not to purchase any large assets pre-election, as their decision to invest hinges around the outcome of the election,” Goslett explains.
However, if the election goes smoothly, it will bring confidence and certainty back to the market and the economy as a whole and hopefully be the catalyst that creates positive strides in the right direction. This is in line with de Kock’s prediction that there remains the potential to end the year breaking through the forecasted percentage for the high road scenario altogether.