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Predictions for the 2019 property market

MAIN IMAGE: Tony Clarke, MD Rawson Property Group, Dr Andrew Golding, CE Pam Golding Property Group and Adrian Goslett, regionald director and CEO RE/MAX of Southern Africa.

What a year 2018 has been: from a positive start with a newly instated president to a VAT increase, record-breaking fuel hikes, a recession and blackouts as we enter the festive season. As we tear off the last page of our 2018 calendars, the question for real estate investors as well as everyday citizens now becomes: what awaits us in 2019?

Looking back on 2018

“2018 opened on a high note with the induction of Cyril Ramaphosa as president,” says Tony Clarke, managing director of Rawson Property Group, “but the subsequent uptick in sentiment was sadly short-lived. Since then, lack of clear direction on public policy, and controversial issues like land expropriation have all contributed to dampening consumer and investor confidence.”

The result, he says, has been a “deer in headlights” situation, with large numbers of property investors, prospective buyers and existing homeowners adopting a holding pattern while they wait to see what the future holds. This, together with 2018’s widespread cost escalations courtesy of VAT, fuel and fuel levy increases, has severely impacted market activity and suppressed house price growth.

“Year-on-year residential house price growth in 2018 has averaged at around 4.1%, nationally,” says Clarke. “That’s below CPI at 4.6%, which means prices are effectively in a marginal decline. Properties have also been taking longer to sell, spending around 17 weeks on market. That’s a common trend in a buyers’ market like the one we’ve experienced over the course of this year.”

Year ending on a more positive note but …

News that South Africa’s GDP increased by 2.2% in Q3, with fuel prices considerably reduced and the end of the technical recession, has ended the year (2018) on a more positive note, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

However, the re-introduction of scheduled nationwide blackouts by Eskom and prior to that the Reserve Bank’s decision to raise interest rates by 0.25% in November are indicators that we’re not of the woods yet.

Golding says the growth outlook for early 2019 remains subdued with the Reserve Bank reducing its growth estimate for 2018 to just 0.6% – the fifth consecutive year in which growth has remained below 2%.

“Even as the local economy emerged from a recession in the third quarter, the economy continues to struggle to regain momentum, despite the political changes, in part because both consumer and business confidence remains subdued,” Golding says.

Not all residential market segments were badly affected by 2018’s challenging conditions, however. Some saw remarkably strong growth in the face of the general market decline. This, Clarke says, is largely due to evolving buyer priorities focusing demand on a few, key areas.

Smaller properties

Consumers have felt the pinch of this year’s escalation in the cost of living and are more often opting for smaller properties close to business centres to cut down on traveling costs to work and schools. Says Clarke “Sectional title properties and security estates have definitely become the most popular property types with buyers and have retained their value very well as a result. Student accommodation and homes near business hubs are also highly sought-after and growing in value, as are retirement properties which are in pitifully short supply here in South Africa.”

Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, predicts that there will be a continued move to smaller, more manageable properties – such as sectional titles and estate-style living, lock-up and go type of homes, for example – as consumers continue to feel the pinch of rising inflation and cost of living.


In the Western Cape during this year’s drought saw more home-buyers asking for houses with energy-savers such as solar panels and features that reduce water usage such as water tanks. Golding expects to see this trend pick up in Gauteng as well due to the threat of renewed load shedding and the prospect of a water crisis in the province.

“Certainly, as John Loos of FNB has pointed out, containing rising costs such as electricity will be an increasingly important factor for homeowners moving forward,” he says. Golding also expects low-maintenance properties with lower monthly running costs will prove increasingly appealing to home buyers.

Buyer’s market till the elections in May

“Not surprisingly, a lot will hinge around the outcome of the 2019 elections,” continues Goslett. “Leading up to the elections, I predict that house price growth will be slow, somewhere in low single digit numbers, as people await to hear the results before making significant long-term investment commitments. Properties are likely, therefore, to stay on the market somewhat longer during the marketing process for the first and second quarters of 2018, especially those properties in the high-end and luxury market.”

For homeowners and investors, this may be disappointing news, but Clarke says a turnaround – while admittedly not imminent – is inevitable.

“A cycle isn’t a cycle if it’s always on the upswing,” he says. “We’re still experiencing price correction after the last big property boom, but the huge demand for accommodation in South Africa, and our massive emerging middle class, will help us recover quickly once this current period of uncertainty is over.”

Goslett also predicts fewer cash sales and more bonded transactions as the increased cost of living will necessitate higher loan-to-value amounts on property transactions. As small interest rate increases are not ruled out for next year to counter inflation, it is therefore expected that the market will continue to favour buyers in 2019.

“Consequently, 2019 will likely present the best opportunities to buy if you get in during the first half of the year. I anticipate reinvestment (both local and foreign) in the country post-election if the fight against corruption continues and tough decisions are made, which I do believe will happen. Greater stability should lead to consumer confidence and with that a more buoyant real estate market. I therefore predict that the market will turn a positive corner post-election, so if you wait too late to purchase, you may miss the upside,” Goslett advises.

Without hope that there will be a turnaround in 2019 where will we be? What are your expectations for next year? Negative or positive, please share your thoughts and comments to

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