Data analytics company Lightstone has published its latest residential property index, detailing how the Covid-19 pandemic and lockdown have impacted home sales in South Africa.
The report shows that national house price inflation was 3.05% as of the end of December 2020. The low, high, and luxury value bands ended the year at about 2.5% while the mid-value segment ended the year at 4.9%.
The group said that in defiance of expectations, housing prices in the country did not crash during the year.
On the contrary, the luxury segment that has been trending closer to -0.5% at the end of 2019 is now growing close to 2.5% per annum.
The mid value segment has also added some speed going from 3.6% to 4.9%, while the high value segment has remained fairly stable at about 2.5%.
However, Lightstone noted that the low-value segment has decrease from 10.2% to 2.5%.
“At this point, it is difficult to point to the exact reason for the increase in the luxury segment and the decrease of the low-value segment,” it said.
“A possible reason could be because the luxury segment is far more dependent on interest rate, which have decreased significantly, while the low-value segment is more dependent on economic growth, which has also decreased significantly.”
The table provides a long-term view of annual rates of inflation for various geographical areas and property types.
It remains one of the best times in decades to buy property, said Samuel Seeff, chairman of the Seeff Property Group.
“The key driver of the market is the five-decade low interest rate which currently provides about a 30% saving on borrowing costs. At the same time, the banks are still keen to lend and first-time buyers can find favourable conditions.
This has seen a flood of first-time buyers heading to the market who are keen to get an offer to purchase signed and accepted as quickly as possible so that they do not lose out.
However, Seeff cautioned that first-time buyers must do their homework and ensure they inspect the property properly before making an offer.
*Article sourced from Business Tech*
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