HEIEBRG ESTATES NEWSLETTER: MARCH 2024

Dear Property Partners

Our SA Property Market being one of the main contributors to the GDP, has lately shown some positive recovery albeit very moderately. On the one hand, there is some progress but on the other hand, a huge percentage of homeowners are still under severe financial pressure as illustrated by a huge and growing percentage of property owners getting behind in their monthly bond repayments. The South African economic state of affairs with its continued high interest rate and inflation, remains huge factor that impacts on affordability as observed throughout every sector of our Real Estate Market. The full impact of the series of interest rate escalations is still busy manifesting itself throughout our property market sectors and the next six months are widely expected to remain challenging.

The Buyer’s market as also reported in our previous Heiberg Estates February Newsletter, will continue for some time to come whilst the rate of annualized consumer inflation will remain to be marginally higher than the rate of increase in home prices. Interesting to note that looking at our residential property market as a whole, Gauteng and not the Western Cape dominated the home loans market over the past 12 months where Pretoria and Johannesburg, recorded 52% of all home loans awarded by BetterBond. BetterBond expect that in the current macro-economic environment with limited growth, coupled with higher debt-servicing costs due to consistently high interest and inflation rates, home loan activity and sales will continue to be constrained. Under these conditions, prospective Buyers are still in very good bargaining positions to pick up excellent property investments below market-related prices.  

Fortunately, our agents at Heiberg Estates have lately been experiencing more property interest and buying activity which resulted in good and solid property sales over a broad spectrum. We are also observing with our never-ending load shedding as well as now in addition water delivery challenges, that the ability to deliver sustainable municipal services is increasingly playing a role amongst homebuyers’ choice of location. Also important to note that increasing Buyers’ request for properties with back-up power and/or water supply systems and if present, this added value is for sure used to the advantage of the Seller in obtaining a good and market-related selling price.

ANNOUNCEMENT – MALTA PROPERTY INVESTMENTS!

We are delighted to invite you to meet with visiting and top award-winning Malta Property Agent, Paul Bondin, from the leading Frank Salt Real Estate Company. He will be in Johannesburg and Pretoria on 10 and 11 April 2024 to meet with you individually.  After a recent extensive tour through Malta under Paul’s outstanding professional guidance, I am convinced that this country as a Gateway into Europe, offers outstanding property investment opportunities for South Africans, and at prices beyond belief!  There is a great and ongoing rental demand with proven and guaranteed capital growth in Malta. Furthermore, Paul can offer you a one-stop- service in assisting you regarding all your property needs as well as the further management thereof. 

This is without doubt a merited opportunity to investigate investing and diversifying your property portfolio in the vibrant and ongoing growing Malta Property Market! Contact Paul for a one-on-one meeting on franksalt.com.mt/SAF or call me on 083 654 3773 to arrange a personalized and private meeting on 10 or 11 April at my offices located at 894 Jan Shoba Street, Brooklyn. For further information, kindly scan the QR-code on flyer attached:

Some of the latest property-related statistics and interesting facts:

•                 The latest economic growth figure has been released where leading economists predict an economic growth rate of 1% to 1.4% for 2024, whilst the SA Reserve Bank is expecting it at 1.2% – at least better than last year’s growth rate and potentially avoiding a recession which hopefully will play a positive role in the SARB’s decision to start lowering interest rates again towards the middle of this year. Unemployment is a huge factor and with a growing economy also comes sustainable job opportunities, that will in turn allow more people to enter the property market.

•                 The cumulative impact of 4.75% interest rate increase as of November 2021, still has far-reaching effects on our lethargic property market, especially where increasingly homeowners are getting behind in their monthly bond repayments. This is illustrated by the fact that where repayments were more than 3 months in arrears last year, this figure increased sharply by 35% over the last 6 months.

•                 Resilience fortunately remains in our residential property market, where in January year-on-year home price increases were recorded at an average of 4.2% and for first-time buyers at 5.1%.

•                 BetterBond released statistics pointing out that their home loans for purchase prices below R1m were recorded at 45%, and that Gauteng’s share of home loans recorded over the past 12 months was 52%, followed by the Western Cape and KZN.

•                 Despite the semigration pattern over the past few years to the Western Cape draws so many people due to factors like sustainable service delivery and basic solid governance, Gauteng still offers the best job opportunities where the Gauteng economy and GDP remained relatively unchanged over a prolonged period  – 33.1% in 2022 versus 33.2% in 2013.

•                 The ongoing downward pressure on our property markets, is observed through a recently published FNB Property Barometer where it is recorded that incidents where property owners sold to upgrade have slowed considerably since the beginning of the tightening cycle from 15% in the 4th quarter of 2021 to only 1.1% recorded in the first quarter this year.

•                 Emigration-related sales were steady at 8% but is significantly lower than the peak of 18% as observed during 2019 but it is still in line with the long-term average since the 4th quarter of 2007. Semi-gration/relocation sales were recorded at 13% of all sales in the first quarter of this year, up by 2% from the 11% as per the previous quarter. 

•                 Home selling activities are slowly but gradually on the recovery whilst fortunately for home Sellers, there is a reduction in time to sell a property.  The average time that market-related priced properties are on the market before being sold, was reduced during the first quarter of this year to 10 weeks and 6 days (76 days), from 11 weeks and four days (81 days) as per the previous quarter.

•                 FNB reports that financial pressure-induced sales receded in the first quarter this year, registering 19% and down 6% from 25% of total sales volumes the previous quarter. At that level these sales closely aligned with the historical average of 18% recorded since the 4th quarter of 2007.

Our SA Property Market is cyclical, in the current macro-economic environment of subdued growth and higher debt-servicing costs coupled with the continuous high-interest rates, activities on all fronts all over the SA Property Market will remain constrained, and the Buyer’s Market will remain to be at the forefront with excellent property investment opportunities presenting itself. With our looming election around the corner, the sustainable delivery of municipal services will play a role in property investors’ choice of location.

There is hope and expectations that we are approaching a period where there could be a long-awaited series of interest rate cuts as from the middle going forward towards the end of this year, with moderately better economic growth prospects and more sustainable job opportunities coupled to this scenario. This should give more impetus to our property market as a whole and result in more property sales with property price increases.

Don’t wait too long should you be in the market to buy as the present state of affairs is still in favor of the Buyer with excellent property investment opportunities presenting itself.

Your Heiberg Estates Team remains to be on 24/7 standby – don’t hesitate to contact us! Please scan the QR-code to visit our website:

Kindly remember to book your Malta Investment Property investment opportunity session with Paul Bondin,  on the 10th or 11th of April! Or call/ e-mail me to arrange for you!

With our very best and blessed Easter wishes.

Yours faithfully

Bambie & Heiberg Estates Team