Property News - April 2009
Welcome to our property investment newsletter, the aim of which is to keep you up to date and informed as to the most recent property trends.
With the South African Reserve Bank having now slashed the prime lending rate by a further 100 basis points, down to 13%, we should start to see a recovery of the South African property market towards the middle of 2009. Further cuts are to be expected when the Monetary Policy Committee meet next month.
Residential building statistics released by Statistics South Africa for January 2009 show a continuation of the slowdown in building plans approved for new housing, while the construction side has improved somewhat in the second half of last year, but showed some weakness again early this year.
The property bubble has burst globally and the world wide economy has shrunk. Property values in almost every country have dropped and although no-one knows how much further they will fall, there is no doubt that the market is starting to present unprecedented value to buyers. The credit crunch has slowed the ‘new home loans’ market and there is now institutional aversion to risk.
Rents in Prime Central London have fallen dramatically over the past six months, with falls of 9.6% and 7.3% recorded for the final quarter of 2008 and the first quarter of this year.
The crisis in the housebuilding industry could result in significant changes to the way new homes are financed, built and planned in Britain, according to a major new report by Knight Frank.
The latest developments and future prospects with regard to inflation, as well as global and domestic economic conditions are seen as the main reasons for the further lowering of interest rates.