What does 2016 hold in store for property and you?

Myles Wakefield, CEO of Wakefields Real Estate, gives his view on how the property landscape is likely to look – and play out – as we head into 2016

How do you think the property market in Durban will perform in 2016?

We’re currently experiencing a gentle levelling off of the property market, where supply and demand is becoming more balanced, with stock shortages not as dire as previously. I believe the extent to which the levelling off will continue into next year, is largely dependent on interest rates. As we all know, those increases are premised as much on global factors as local, but elements such as a weakening of the rand or a downgrading of our credit status would certainly be contributing factors to a rate increase.   

On the positive side, we’ve enjoyed a low interest rate for a while now, and the increase we’ve had has been slow and small. My view is that, very much like we’ve had this year, there’s a 60 to 70 percent chance that interest rates will have a similarly slow and steady increase in 2016. 

What areas should investors keep an eye on?

In my opinion, rather than identifying specific suburbs, look at pockets within all suburbs. Do your homework. The ideal investment opportunity is to find that corner of a suburb where, for various reasons - great transport routes/tertiary institutions/schools – quality tenants are plentiful, where rentals are able to cover your bond and expenses, and where an annual escalation of rental is easily accepted. Rather than focusing on the property’s possible escalation in value, concentrate on covering your costs. Over time, history indicates that increased equity is likely – but view it as the cherry on the top. 

A growing number of Gautengers are moving down to the Kwazulu-Natal coast. Do you believe this trend will escalate in the new year?

I do think this trend will continue, largely because of KZN’s relative affordability and unbeatable lifestyle. The south coast has always attracted those from Gauteng, and there’s no reason for it to alter – exquisite beaches, laid-back lifestyle, golf courses, and accessibility to everywhere. And that includes retirees, holidaymakers and residents. The KZN north coast’s superb range of gated estates – with first phases of Sibaya and Ridgeside precincts offering further opportunities – plus proximity to the airport, is increasingly enticing to those who still need to commute (perhaps only for a couple of years before retirement), or for those baby boomers seeking a retirement place in the sun, who eye our weather, our beaches, views, greenery...and relatively speaking, affordability and minimal traffic. Yes, I do believe this trend will escalate. 

Do you believe the current economic conditions are affecting buying decisions? If so, do you think that more buyers will hold back from investing in property in 2016?

I don’t believe the economic conditions are currently affecting consumer property buying decisions, but naturally, if our economy tightens further, interest rates increase (we certainly have little control over the global economy’s knock-on effect on our own), it’ll be about changes to each individual’s circumstances rather than a general trend. Consumers are aware that the current economic situation is in a state of flux, and are being more cautious about personal spending. If everybody – public and private - ensures their house is in order, controls the elements they are able to, we should withstand whatever lies ahead in 2016.