While the latest interest rate increase may well take some gloss off the process, the South African residential property market will nevertheless continue to settle into a “new normal” mode that is more realistic and more sustainable,” says luxury homes marketer Ronald Ennik.
“Lets face it, the halcyon days of 2005/6 (before the mortgage origination business collapsed) were never normal, and are unlikely to be repeated,” adds the founder and CEO of Gauteng-based Ennik Estates.
“Also unlikely to be seen again is the prolonged laager mentality that kept the bulk of buyers and sellers out of the market since 2008,” he adds.
“Prior to the rate increase, we were seeing a steady trickle back into the market of the dammed-up demand of past years. Show house attendances have been better than they were six years ago, and more and more noteworthy sales have been coming through – at prices not seen for a long time.
“I believe that this process will largely discount the interest rate increase and continue on its path,” says Ennik.
“Also increasingly evident now – certainly at Ennik Estates – is the welcome return of the classic sole mandate, which ensures that it is buyers, and not estate agents, who compete on a property.
“Furthermore, after being in virtual mortgage-granting shutdown since 2008, banks have their heads back above the parapet and are now far more consistent and predictable in their home finance decision making – which is a stabilising influence,” says Ennik.
“All indications are that this gentle improvement in market conditions will continue – albeit at a slightly slower pace – particularly if the 2014 general election comes and goes smoothly and there are no unpleasant surprises on the socio-economic and political front,” he concludes.
(Ennik Estates is the exclusive affiliate in Gauteng of Christie’s International Real Estate – the global luxury property arm of the world’s largest and oldest fine art auction house.)
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