Predicted 40 percent drop in property prices 'not realistic'
If you bought your house two years ago you will have to pay about 35 percent more on your bond instalments, says Jawitz Properties chairman Eskel Jawitz.
Given the escalating price of petrol, a looming hike in electricity costs, the new rates and taxes coming into force, coupled with the higher bond repayments, the situation points to only one thing, Jawitz says.
"We are all going to have to tighten our belts and wait until the turbulence subsides."
He says the situation is worsened by the fact that the net disposable income of the average consumer is a lot less than it was two years ago.
But Jawitz says despite the latest increase in the interest rate, sellers should not overreact to the sensational and unfounded claims made by Lew Geffen of Sothebys International Realty last week that properties will drop by 40 percent.
While property prices will no doubt fall, Jawitz says, a 10percent to 20percent drop is a more realistic figure.
"Sellers who panic in response to the 40 percent drop as claimed by Geffen run a serious risk of underselling their homes even in this market.
"Notwithstanding all of the above, the one positive factor that augers well for the residential property market is that even amid all the concerns, buyers are buying, sellers are selling and properties are changing hands," Jawitz says.
"It all depends on the price."