While residential property markets are, by their very nature, local - as they are not traded on global markets like commodities, currencies and equities - all real estate markets are influenced by global forces which ultimately shape their long-term prospects.
“Rapid population growth combined with the ongoing shortage of new housing suggests that the local housing market will continue to enjoy a solid underpinning during the year ahead,” says Dr Golding.
This is according to Dr Andrew Golding, chief executive of the Pam Golding Property group.
“In concluding a successful purchase of a home, or a property investment abroad, it is important to understand which forces driving a property market are local and which are more universal in nature.”
In a recent research note titled ‘World Residential Markets’, global real estate company and Pam Golding Properties’ strategic partner, Savills, put aside local issues and focused instead on the basic, longer-term market drivers which are relevant to all property markets across the globe.
“While South Africa’s housing market is undoubtedly influenced by our unique political history, and continues to be shaped by unfolding domestic developments, the global market drivers identified by Savills are equally relevant to understanding the key dynamics in the local housing markets,” says Dr Golding.
According to the Savills research report, the single fundamental driver of residential property demand has always been the number of households in a population seeking shelter.
Dr Golding says the price of these homes is then a function of the number of existing housing units (i.e. housing stock) and the amount of money available with which households can compete for them.
SOURCE AND FULL ARTICLE HERE (PROPERTY24)
Posted in Property News
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