"The Economist" magazine recently named the South Africa real estate market as the world's best-performing housing market in the longer term. The magazine maintains a global house price index, and that shows a cumulative 418% rise in South Africa real estate prices over the last 12 years (2007-2009). The magazine tracks 20 other housing markets, and none have shown that level of performance. Australia, Britain and Spain were next on the list, at 181%, 175% and 167% respectively.
Globally, one would be hard-pressed to find areas that haven't participated in the real estate and financing woes of the last three years. However, it appears, according to the magazine, that the South Africa real estate market is one of a very few that have managed to climb back into the neighborhood of the 2008 home price peaks. While seven of the twenty areas tracked have begun to see price increases, none have come back to 2008 levels. As a helpful comparison, the U.S. Case-Shiller Home Price Index shows increases in 2009, but nationally prices are still down 30% or so from the 2006 peaks.
In fact, recent data shows that the average South Africa home price is now approximately 1.2% higher than in 2008, a peak year. Prices are up 9.7% over the second quarter of 2009, so things appear to have turned around for the South Africa real estate market.
All of this news seems to be discounted by some spokespeople from the South Africa real estate industry, however. While the government's current budget is projecting R6.5 billion in tax relief for property buyers, the real estate industry says that this isn't enough. Barry Everitt, of the Chas Everitt International property group says: "The budget does not contain many direct benefits for the real estate industry, although a largely positive outlook could have a spin-off for the property market."
Gerhard Kotz, of the ERA SA property group, stated that the minister had failed to stimulate the property market. He also said: "House price affordability is the key and in the UK for example, various incentives mean that more people with average earnings can now afford to buy their first house..." And, one dramatic suggestion comes from Tjaart van der Walt, CFO of the RealNet estate agency group in this quote: "To speed up housing delivery, the government should make large tracts of state land available to developers free of charge."
So, even if the South Africa real estate market is doing better than just about any other in the world, there are those who want to see more.
By www.holprop.com (February 22, 2010)
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