The local property industry is currently one of the faster growing real estate markets in the world. Low interest rates and strong growth is attracting an increasing number of investors.
The average price of residential properties has increased by more the 30 percent a year, but despite this the number of home loan applications processed by some of the bigger SA mortgage providers has also reached record highs.
It seems as although prices are rising rapidly; the low interest rates have afforded many first-time home buyers the opportunity to invest in property.
Interest rates are expected to increase slightly but this wonâ€™t cause a dramatic effect on residential property prices.
Although property prices are not expected to drop dramatically in the near future, experts do expect prices to calm down.
Ronan McCool of Re/Max Southern Africa says, â€œEven though the period of frenetic growth is over, the market is still healthy and there are solid investments opportunities out there.â€
According to a report on iafrica.com, areas such as Zimbali Coastal Estate in KwaZulu-Natal and the V&A Waterfront in Cape Town are still experiencing strong growth.
The growing interest from foreign investors is adding an additional dimension to, which further supports the pricing of real estate in areas that are able to attract the attention of foreign buyers.
So while higher interest rates could mean few local buyers – because fewer people will be able to afford the home loans required to buy property, the increased number of foreign buyers should help continue to fuel local property prices.