Standard Bank’s latest Residential Property Gauge indicates a decline in year-on-year growth of 5.2 percent for March and shows no year-on-year growth in February. However, according to Tony Clarke, MD of Rawson Properties, this is not a cause for alarm or holding back on house purchases and residential property investment.

“Some of the people with whom we deal,” he said, “have come to expect the 2000 to 2006 boom to last forever. This is ridiculous. Anyone who has been in the real estate sector for some time will know that ‘right-sizing’ always occurs at some point and was certainly due here after six years in which the average growth rate was 16 percent.”

Readjustment was essential

This phenomenal boom, said Clarke, had greatly increased the wealth of existing property owners, but a readjustment was absolutely essential now if property was not to price itself way beyond the reach of a substantial section of the population, especially those buying at entry level prices.

“For this reason we can, in fact, welcome the adjustment now taking place,” he said.

Shrewd property investors, said Clarke, have always accepted that property is a long-term investment and that slow growth periods inevitably give way to upsurge phases.

Next upswing — 2009

Asked just how significant — and how sustainable — the next upswing might be, Clarke said that he expects residential properties to grow by 60 percent on the current value by 2011 and he is predicting that the upswing will start becoming evident from the first quarter of 2009.

“I definitely do not want to be accused of trying, in typical estate agent fashion, to talk up the market, but I have to admit that I get irritated by the panicky, doom and gloom reports one sometimes reads.

“Residential property has always been a stable, long-term investment. At Rawsons we have sufficient faith in South Africa to believe that we will see significant property growth, albeit on a smaller scale, taking off within the next 12 to 15 months.”