Property owners staying put longer

There is growing evidence that the difficult conditions over the past 24 months in the residential property sector have led to middle class South Africans holding on to their homes longer, says Bill Rawson, chairman of Rawson Properties.

"Our experience in the Rawson Group does not tie up with that of the Lifestyle Risk Research Group which has recently been reported as saying that middle class South Africans now change homes only every 12 to 13 years. We would, however, agree that they are not moving as often as before. Our estimate is that they now sell and move on average every eight or nine years."

Previously, said Rawson, it had been accepted that middle class homeowners moved every six or seven years.

"The National Credit Act, the relatively high cost of new buildings and the cutbacks in earnings have all caused people to move less often."

The act had reduced the number of bonds available - in some areas by as much as 80 percent. This had fostered dual living, renting, and staying longer in a home.

Since last year, Rawson said, building costs had risen by more than 20 percent, making the cost of a new home expensive compared with a second-hand home, where the price in real terms might be 30 percent down on that of 2007.

"Until these costs even out, many major new developments will be held back, again making changes in ownership less likely. Five or six years ago the units in new developments were often better value than second-hand homes."

Before, typical Cape Peninsula suburbs might have supported four, five or six rival agents to every 1 000 homes. Now, the ratio was likely to be four or five agents to 2 000 homes.

"As a result, there has been a two-thirds drop in the number of agents employed - but this is now changing and the numbers are again moving slowly upwards."

Weekend Property supplement (Saturday Argus)

Posted at 10:45AM Nov 16, 2009 by Editor in Residential  |  Comments[1]