Half of South Africans believe property market will fall until end 09

·  Survey reveals that 50% South Africans think property will continue its downward trend until end of 2009

·  ooba forecasts that property market will begin to actively recover early 2010

·  43% people have cut back on luxuries and dinners out to keep up with bond payments

An online survey by ooba to assess South African property owners’ attitude towards the property market reveals that 50% feel that the property market will continue its downward trend until the end of this year.

“The survey reveals that South Africans are divided about the timing of the property market recovery, but they generally agree that recovery will be sometime this year,” says Saul Geffen, chief executive of ooba.

ooba forecasts that the current low level of activity in the property market and negative property price growth with continue until mid 2009.

“Thereafter we expect that the improvement in affordability and sentiment will have a positive impact on house price growth and that activity in the property market will significantly pick up going into 2010,” states Geffen.

Twenty-nine percent believe that the market will begin to stabilise by the end of this year and 19% think it will begin to improve.

The survey also revealed that people still believe that there is value in property.

Thirty-nine percent said that they were hanging onto their properties, 31% said that they were making the most of the buyer’s market and buying a bigger property and 20% revealed that they were buying additional investment properties. Only 6% said that they were getting out of property altogether and 5% said that they were downgrading their home because bond payments were too much.
 
However, people have been hit by slow-down in the economy with 43% cutting back on luxuries and dinners to keep up with bond payments.

“The property market has been hit hard by the high interest rates and tightening of lending criteria,” says Geffen. “South Africans have had to make changes to their lifestyles in order to keep up with bond payments.”

But, there is hope on the horizon.

“The 1.5% cut in interest rates has already provided relief to consumers and we expect further cuts which will improve affordability for prospective home-buyers,” notes Geffen.

The inflation rate is also expected to show a meaningful decline in the early part of 2009 which will help the South African economy.

“However, bank lending policies are set to continue to be stringent during the course of 2009,” warns Geffen. “We advise that anyone looking to buy property apply for an ooba home loan prequalification certificate to determine their ability to qualify and for how much.”

Banks’ are currently requiring deposits of between 10% and 30% which in not expected to be relaxed for most of 2009.