Housing market in recovery brings good news for sellers
Category Market Update
The outlook for property sellers has improved considerably compared to the same time last year. The combination of lower inflation, interest rate cuts, and a better economic outlook has boosted the property market's recovery.
While challenges including an added dimension of risk due to the new US presidency persist, the latest FNB property barometer indicates improved economic fundamentals and with that, the property market now in recovery mode. Properties are selling faster, and there is increased activity in the mid-high house price segments.
Economic growth for this year could reach 1.5% according to the IMF (International Monetary Fund) which is notably up compared to the 0.8% growth rate for 2024, based broadly on factors such as better electricity supply, relaxed monetary policy, and increased investor and consumer confidence.
Another important economic indicator, especially for the interest rate outlook is inflation. This has improved notably from 6% in 2023 to 4.4% last year, and currently stands at 3.2% (January), comfortably at the lower end of the 3%-6% target range of the Reserve Bank, thus paving the way for a further interest rate cut.
The outlook is cautiously optimistic that the market could see at least two further rate cuts. Already, the recent cuts have resulted in savings to households, and combined with salary hikes has increased property affordability, and widened the pool of potential property buyers.
Mortgage originators recently reported that home loan applications have increased compared to the same time last year as more buyers are entering the property market. At the same time, bank lending remains positive with high loan-to-value mortgage granting, and rate concessions for qualifying buyers, all positively supportive of the property market recovery.
Given the more positive outlook, FNB and other market analysts expect house price growth to strengthen further, driven by a combination of low stock levels and higher demand. Seeff Chairman, Samuel Seeff expects the market to perform notably better this year with the Cape property market poised to be particularly rewarding for sellers.
FNB also reported that more people are now selling for lifestyle reasons. The higher price sectors in particular are selling mostly due to relocation and upgrading which further supports the favourable conditions for sellers.
It is therefore a good time to put your property on the market. A reminder that Seeff is a market leader, and what's more, if you sell exclusively with Seeff before the end of April, you could win a cool R1 million cash prize.
If you are thinking of selling, or would like to know what you property might sell for in the current market, give us a call today for a free assessment or to chat about your property needs.
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Author: Gina Meintjes
