Despite the negative effects of High Interest Rates on housing affordability, property prices in South Africa continue to increase. Although, the rate at which your property value is growing has slowed considerably.
Standard Bank reports that property price growth has dropped to about 6.5% year-on-year, and according the ABSA HOUSE PRICE INDEX growth is currently at its lowest since January 2000.
All these figures point to the fact that although there are fewer buyers in the market currently, demand remains high enough to ensure consistent growth in property values.
In previous years, when rates were really low and homeloans were more affordable many more buyers were drawn into the market. This sparked a Property Bubble and put South Africa into one of the top ranks internationally in terms of property growth.
What this means for you:
Buying a house
As a buyer you should notice many more houses for sale, and for longer. If youâ€™re shopping for a new home you shouldnâ€™t rush to place an offer as most properties are on the market for about 4-8 weeks now. Also if the sellers are struggling to find a buyer, youâ€™ll have more leverage to negotiate the price.
As an existing homeowner you should feel secure in the knowledge that the effect of rising interest rates has not had a massive effect on your property value. According to Standard Bank, there are no signs of a recession in the local residential property market.