Gonubie Property has followed much the same pattern as the South African real estate market over the past 10 years. Up to the middle of last year South African property, which includes Gonubie Property, increased at a rate above inflation. During the three years prior to 2007 the increase was dramatic with an increase of probably close to 100 in three years. This pattern was true for most residential property as the number of people with an average income or a high income increased dramatically. The number of poor people did not decrease.
Commercial Property in South Africa as well as in Gonubie was fairly quiet for a number of years and then the demand increase. The South African economy has slowed down which has now caused a situation where there are excess buildings standing empty as well as many new office blocks unoccupied. As companies encounter financial difficulties they lay off staff and is some cases they just close down. What is happening is Gonubie like many other towns is that people are loosing their jobs and then they end up loosing their houses.
As buildings come up for sale so are offices slowly becoming vacant and their office blocks are also becoming cheaper. An interesting trend is that of private businesses. There are suddenly many private and family businesses on the market and it is clear that they are wanting to sell because they are no longer so profitable.
Another area of activity is that of farms because the Government is buying up farms and the farmers are scared that they are not going to get good prices. The crime on farms is also bad an this aggravates the situation.
Auction houses in Gonubie and virtually throughout the country are busy selling houses and commercial property because people cannot afford their bonds and running costs. People extended themselves during the good times and now with high interest rates they are unable too sustain the standard of living the are use to. The banks were very keen to lend money up until the middle of last year but now they have strict laws which control them.
What about developments? Many people have development land and around Gonubie there is extensive property available for development. The problem is that if you build houses you need people to buy them and right now there are very few buyers and the ones that are in the market have their bonds strictly controlled by the banks. Even building a spec house is not a good idea unless you have a definite sale.
Where is South African property heading? Firstly it will go nowhere until at least the elections are complete and bedded down. Secondly one wonders whether there will be any genuine movement until the 2010 world cup and then lastly the people with big money probably will want to look at stability after 2010. Genuine overseas investment will be the main stimulant.
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