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House price growth to reach 9% in 2014

31 Jan 2014

On residential property, they say in line with an improving demand-supply balance, we approach 2014 with accelerating house price growth when viewed on a monthly basis.

So, whereas the average price growth for 2013 was slower than that of 2012, that was due to growth earlier in 2013 being slower, whereas in the latter parts it was once again picking up speed, reaching 8.7 percent year-on-year (y/y) in December.”

As a result, they explain that despite a slowed economy in 2013, other factors, most notably some possibly more relaxed lending by banks and supply constraints - their 2014 average house price growth forecast is 9 percent up from 6.8 percent growth in 2013.

For buyers entering the market, this could be good news as banks have eased up slightly and are starting to grant loans.

Org Geldenhuys, managing director of property development and marketing company, Abacus Divisions, says in 2013, financial institutions marginally relaxed their lending criteria an ease which is expected to continue during 2014 and depending on how the new credit amnesty bill impacts the market, 2014 should see a greater level of loan easing.

In 2013 the percentage of loan application approvals increased to over 51 percent up from the 26 percent seen in 2009 during the height of the global economic recession.
“What we are also seeing on the ground is that we have more cash buyers – people and companies who have been sitting on their money during the economic recession.”

He says these individuals are now feeling more buoyant and are keen to invest some of this cash.

This bullish sentiment is going to assist with the recovery in the commercial property market and the residential property market as a whole, he points out.

January 2014 Property 24 News Article