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Nov 8, 2019 | Investment

Pam Golding’s year in review

Andrew Golding and his team presented their annual property review, a comprehensive summary of the performance across all propery types and price brackets, offering insight into the influences on the market. We’ve singled out a few select points of interest from the in-depth study:

  • According to Lightstone, nearly a third (29%) of all sales across South Africa during the past 12 months (Oct 2018 to Sep 2019) were in the lowest price band (<R0.4m) while just 16% were between R1.5-R3m and only 5% of all sales during this period were properties priced over R3m.
  • Evidence of the appetite for home loans is visible in the improving loan conditions – with the average rate of concession falling below prime three times thus far this year. For the year to date, the average concession is just 0.04% above prime – the best rate charged since January 2011.
  • Downscaling remains a key theme – with 23% of all sellers offering that reason. It is also the dominant theme across all price bands. The second most popular reason for selling is financial pressure.
  • Emigration has become a more prominent factor over the past two years, according to FNB. Emigration sales have risen to 13.4% in Q2 2019 – which represents a 10-year high.
  • There is an ongoing demand for sectional title homes – more compact with lower maintenance and lower operating costs, and homes in convenient locations close to schools, the workplace and all amenities.
  • The semigration trend will continue to the coast, primarily the Garden Route and KZN – Durban and north to Ballito, and the Western Cape – including the Boland and Overberg. Areas such as Ballito and Knysna, also St Francis Bay, Port Alfred and Jeffreys Bay, which were previously considered holiday hamlets, have become primary residential areas.
  • Estate living remains sought after, especially eco-estates and those which provide a range of amenities, such as schools and leisure activities. Then there are what one could refer to as mixed-use estates. There is also a strong focus in estates on creating a greater mix of price bands and retirement developments, ensuring broader appeal both in terms of available homes and amenities, such as shops, educational and medical amenities.
  • Sustainable homes are in demand courtesy of the sudden recurrence of load-shedding, coupled with rapidly escalating costs of electricity and water shortages, which has seen homeowners and tenants increasingly turning towards homes with ‘green’ features.
  • The shortage of accommodation for students near universities and colleges continues unabated – a trend we believe will continue and strengthen in 2020. During the past year Pam Golding Properties sold close to R1 billion in student apartment blocks.
  • Increased demand for international property is being fuelled by a desire to diversify investment portfolios with a rand hedge. The need to diversify, coupled with demand for offshore citizenship, has seen increased uptake by buyers investing in residential property in Portugal via the Golden Visa Programme as well as a surge in interest in the US EB-5 Programme for access to a Green Card and the Grenada Citizenship-by-investment programme. Notwithstanding this, property in Mauritius and the UK remain firm favourites with SA investors.

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