Property boom expected to "level out"

ACTIVITY within the national housing market is expected to “level out” in response to the challenging economic circumstances ahead, says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa.

When unemployment increases, spending power declines and fewer buyers can afford to purchase property.

“This translates into a buyers’ market where the supply of properties outweighs

the demand from buyers. “Those whose salaries are affected might become unable to afford the costs of their home loan, which will mean more properties will enter the market, with some falling claim to bank repossession and distressed property sales.”

Goslett says, in time, this can put downward pressure on asking prices.

It is hoped that an increase in the vaccination rate will prevent any further restrictions on economic activity and

allow for a period of recovery. “Provided that the economy is allowed to operate without any further restrictions, it is possible for it to begin a gradual recovery and for the downside risks to the local housing market to be contained.”

While unable to predict if and when the property market will be affected by the current economic conditions, Goslett remains optimistic about real estate as an investment vehicle.