The local property market is a beacon of hope for hard-pressed South African investors who have become wary of the erratic swings in the stock market.

Berry Everitt, MD of the Chas Everitt International property group, says interest in tangible assets such as property is rising rapidly as investors watch the value of stock holdings plummet. “Investors are flocking back to property, with attendance at show houses notching up an incredible 300 percent increase in the past month,” he says.

“Interest is also translating into actual sales and although the ratio of bond approvals to applications is still low, the volume principle means that more loans are being approved than in the very recent past. This will boost the market.

“Caution by the banks in granting credit, however, is to be welcomed in the long-term interests of a healthy industry – and indeed, this prudent approach has better enabled the country to weather the current storm in global financial markets, as Minister Trevor Manuel pointed out in this week’s mini-budget.”

Everitt adds that the severe beating the rand is suffering at the hands of strong currencies has stimulated renewed interest in the local market among foreign and expat buyers. “Buyers with euros, dollars and pounds are once again able to buy local property at very reasonable prices when the sales price is converted into their own currencies.

“Their confidence has also been boosted by the shelving last month of the controversial Property Expropriation Bill, which previously dampened appetite for local property investment.”

A further factor that is underpinning confidence in the local property market is that South Africa is one of very few countries with a ‘market in waiting’, he says. “Like China and India, South Africa is likely to benefit from a vast number of new home buyers who are becoming financially able to buy property. Steady demand from first buyers will stimulate prices in the entry-level market, which will eventually feed through to the rest of the market, to the benefit of homeowners and investors alike,” Everitt says.