2009/02/09

The first quarter of 2009 will herald the turn-around in the South African property market after a year fraught with increased interest rates and the global economic crisis.

According to ClareMart Auction Group CEO, Jonathan Smiedt, South Africans have reason to be optimistic with further interest rate drops anticipated in the first three months of the year. Our economy has not been threatened to the same extent as overseas. "Government safety nets served as a buffer from the international crisis and softened the impact on our local economy. This in itself should be cause for a more positive market sentiment."

Predictions are that 2009 will be a tough financial year, but according to Smiedt 2008 will have been the worst period in the South African economy for the last two decades. "In 2009 we are mopping-up the remains of the 2008 crisis. It is also the turning point for the local property market," says Smiedt.

The increase seen in insolvencies and liquidations should be seen as the product of the past 18 months, when South Africa had to contend with record high petrol prices, the Eskom power crisis and high interest rates. All of which are now in the past. "Insolvencies and liquidations should now level off slightly toward the middle of the year and we then move towards another growth phase," says Smiedt.

With South African property still hugely under-valued when compared to the rest of the world, we can expect another growth period to follow. "2010 is a beacon in our lives and then we will be on the world stage for the next 18 months. Already the decreased interest rates and the build-up to 2010 have caused an increase in activity in the property market" says Smiedt.

"This is currently a buyers market and we can see it in our attendance and sales figures."

The commercial and industrial property market managed to weather the storm more successfully than the residential market according to Smiedt, but he is positive that the latter part of 2009 will see a recovery in the residential property market.

According to Smiedt confidence in pricing is on the increase, with buyers realising that residential properties across board are genuinely for sale. "Furthermore, at more realistic prices than a year or so ago, residential properties will still show plenty growth in the long run" says Smiedt.

Property24