The property market may be seeing tough times for some but the elite few are having a blast. There’s no reason to get bent out of shape about it though, this isn’t exactly a new kind of situation in terms of property. South Africa isn’t unique in this regard either, it’s called survival of the fittest and it’s happening all over the place.
The prices of real estate have dropped down because people still can’t afford luxuries, despite the supposed recovery from the depression, but salaries haven’t exactly sky rocketed either. What this essentially means in practical terms is that the middle class and the lower class are struggling to retain their property – or selling it off outright. The banks aren’t big on making loans at the moment, or at least not the kind of loan that you’d actually want to accept so who’s scoring all of the property?
You guessed it! The usual suspects, the fantastically rich are scoring once more as the prices are low (in relevant terms) and they don’t really need to take out loans to make a purchase. The trend here is for them to buy up all the property that they can at a much lower price, wait for the market to stabilize and sell them off at a huge profit, or simply rent them out for the same result. The rich get richer and the poor remain ever poor. Once again though, this is simply survival of the fittest and nothing to get upset over.
It’s a game that you may one day be in a position to play yourself and it’s certainly an enjoyable one. Millionaires are sometimes made and broken overnight – take The Donald as an example. He may have his eye on the Presidential chair at the moment but the man has gone from hero to zero on several occasions, his most recent financial debacle isn’t even completely solved at this stage. As much as I’d like to talk about Donald Trump though, there are more interesting things happening at home.
An official report I looked over stated that the SA economy had experienced a 4.4 percent growth spurt in the fourth quarter of 2010 and the GDP is looking good as well. It did warn that limited credit and fixed investment spending growth would slow things down but on the whole this looks positive for the locals. The bottom line is, if you didn’t manage to make your mark this time around on real estate, South Africa may have some new opportunities for you soon.
Warren Kings is an online journalist living in Plettenberg Bay with a long time interest in real estate in South Africa. Plan your next property purchase or sale carefully by doing your research and talking to the people who specialize in residential, commercial and development investment.