Not only does South African politics influence the real estate market but neighbouring countries' political situation can easily spill over into SA. In recent history stats have shown that the number of sellers selling due to emigration has doubled and this is mostly due to political instability. Zimbabwe has for long had political problems and this directly influences any potential investments both locally and internationally, says Craig Hutchison chief executive officer of Engel & Völkers Southern Africa. Hutchison says South Africa has never lagged behind any country when it comes to political turmoil. This political situation has influenced everyone and almost everything in the country, so how has it and will it influence the real estate market. In recent history stats have shown that the number of sellers selling due to emigration has doubled and this is mostly due to political instability. Factors that are also indirectly influenced by politics are things like rising inflation due to global food and oil prices which diminishes monthly disposable income. This all leads to a rising household debt-to-disposable-income ratio, he says. Even though we have seen some ups and downs in the real estate market during the years since the first democratic elections, the future still looks bright. ECONOMIC
Not all is bad in the economic sector and many opportunities have opened up. Firstly the prime interest rate has been reduced by 5.5% since the property boom. This has been very positive for both existing homeowners and those wanting to get into the market for the first time. Although financial institutions no longer offer interest rates on residential property below the prime rate, the vast reduction has ultimately still led to the general monthly bond repayment being lower than those seen during the boom. Homeowners who bought a home for R1 million during the boom at an interest rate of 14% over a 20 loan period, were paying around R12 435.21 per...
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