?The demand for housing, on the other hand, is set to increase dramatically, and because of that we foresee that there will be a slight increase in the number of property transactions and in the number of new developments coming to the market. There will also, of course, be strong demand for rental properties, which will be good for buy-to-let investors and prompt an increase in investment purchases.? He says large numbers of ?distressed? properties still being brought to market by the banks and sold at below market value will suppress home prices in 2013 ? ?but at the same time these ?bargain? properties will sustain activity and awareness and make homeownership more accessible for quite a number of people?. * Rudi Botha, CEO of BetterBond, SA?s leading mortgage originator, does not expect any increase in the prime interest rate until at least the end of 2013. ?But many prospective homebuyers will remain unable to take advantage of the increase in home affordability offered by low interest rates, so there is also unlikely to be any significant rise in either home sales or home prices next year.? The problem is that many households still have just too much debt to qualify for home loans, he says ?and the situation has being exacerbated this year by huge growth in unsecured lending, particularly by loan sharks who take advantage of consumers and charge exorbitant interest rates that just sink people deeper into debt?. However, he believes the banks ? while retaining their strict credit criteria ? will be focusing more on secured lending next year rather than personal loans and other forms of unsecured lending, and that this will encourage consumers to pay down their debts and save the deposits they need in order to obtain home loans at advantageous interest rates.And that should bring about an improvement in home loan grant rates and successful home purchases towards the end of 2013. * Berry Everitt, MD of the Chas Everitt International property group, says 2013 will be the year when property developers start making a moderate re-entry into the market. ?There has of course been some development at the lower end of the market for the past few years, because buyers in this sector are often subsidised or able to gain special access to 100% home loans. However, what I anticipate now is that developers will become increasingly active in the R650 000 to R850 000 price bracket where the banks are lending well, especially on newly-built homes.? And speaking of banks, he believes they will continue, for most of next year, to keep a lid on the market by valuing properties and lending according to ?bank security value?, which does not necessarily co-incide with actual market value. ?In other words, they will often not be prepared to lend as much as the prospective buyer is willing to pay, leaving the serious seller little choice but to lower his price if he wants to conclude a sale.? An alternative response, Everitt says, might be for the buyer to raise the amount of his deposit, ?but in practice this seldom happens, and it is much more likely that, if the seller won?t budge, the buyer will abandon the deal and look for a cheaper property. And either way, this practice is likely to prevent the rising housing demand that we see occurring next year from being translated, as it usually would be, into rising property prices. In fact, we do not expect to see nominal house price growth top inflation next year.? * Jan Davel, MD of the RealNet estate agency group, says household finances are likely to remain under severe pressure in 2013, which will limit the ability of prospective buyers to qualify for bonds and become homeowners. ?And low interest rates will make it difficult even for those without much debt to grow their savings and pay the substantial deposits that banks so often require now in order to grant a loan.? Meanwhile, he says, there still is an abundance of distressed properties being sold by the banks at much-reduced prices ? about 80% of current market value, on average ? and this will have an additional negative effect on house price growth. ?Consequently, we expect relatively low nominal house price growth during 2013, and negative real house price growth, similar to that in 2012.? As for the real estate industry, Davel says this will be going through a ?detox? procedure in 2013, as current real estate practitioners have until the end of 2013 to bring their minimum qualifications up to date, while Continuous Professional Development has also been brought into play. ?These barriers to entry, together with legislation like the Consumer Protection Act, rising consumerism, ever improving technology and a much more efficient Estate Agency Affairs Board will all have an extremely positive influence on the industry, since agents who don?t pay attention to the new training requirements, skills intensities, rules, procedures and market conditions will be unable to keep up with those who have geared up for a more professional arena.? * Adrian Goslett, CEO of RE/MAX of Southern Africa, says high debt and poor savings have a negative effect on affordability levels and have held back the market and slowed down recovery, and that for this scenario to change in 2013, South African consumers will need to focus on clearing their debt and starting a savings programme to ensure their ability to secure home loan finance in the future. ?Meanwhile 2013 will see the property industry transform, this time in the form of a revamped Estate Agency Affairs Board (EAAB), thanks to Human Settlements Minister Tokyo Sexwale and his department. One of the goals of the EAAB will be to ensure that the property industry is more representative of all races and genders, with an emphasis on attracting the youth into the industry, and real estate businesses that promote and encourage transformation will continue to thrive and gain support across the South African market spectrum.? Goslett also says that property pricing and the perceived value of property will continue to be key factors in achieving sales and he expects that trading conditions and house price growth will remain relatively low during 2013. * Seeff chairman Samuel Seeff says that after five tough years for the property market, there is still no real recovery on the horizon for 2013. ?While there have been some encouraging signs and a little more energy in the market this year, continued uncertainty, low economic and job growth, high household debt levels and constrained mortgage granting are just simply weighing too heavily on the market. The increased demand that is evident is simply not translating into any noteworthy increase in transaction volumes or prices.? He says the affordable housing sector (below R1,5 million) is likely to see the bulk of demand and movement next year. ?Buyers can, however, expect the tight mortgage lending criteria and deposit requirements to persist. Rising utility and basic living costs will continue to eat into consumers? wallets and on top of this there are high transaction costs that are often overlooked. Transfer duty, bond costs, legal fees and capital gains tax can amount to as much as 20% of the total transaction value and do not add to the asset value. Consequently, government will need to relook taxes if it wants to encourage greater home ownership.? From an industry perspective, Seeff anticipates further consolidation with the bigger real estate brands absorbing the bulk of activity in the market. ?Real estate professionals are likely to continue to operate under challenging conditions, earnings will remain under pressure and deals will still take long to wrap up particularly in areas where the councils are not able to provide efficient clearance figures and certificates.? * Lew Geffen, chairman of Sotheby?s International Realty in SA, says he expects a ?much more buoyant? residential property market in 2013. ?The recession is over, not only economically but also psychologically, and consumers are now much more confident about moving on with their lives and advancing their homeownership plans. ?As a result, housing demand is increasing at all levels, and although bank caution is slowing sales in the under-R1,5m category, this is much less of a problem in the higher price sectors, where buyers generally require finance for a smaller percentage of the purchase price. Recently, we have experienced a sales surge in the R6m to R10m range, driven mainly by SA buyers taking the opportunity to upgrade to larger and more luxurious properties at the current favourable price levels ? and on average requiring financing equating to only 40% of the purchase price.? However, with regard to overall price expectations for 2013, Geffen also expects growth to be constrained at around the level of inflation until more stock is absorbed, but is confident that they will start to climb strongly in 2014, ?which will be the start of a new boom?. * Keith Wakefield, chairman of Wakefields Real Estate, the largest independent real estate company in KwaZulu-Natal, says prices in some areas have already moved up and there are indications that this could become more widespread in 2013, thus spelling the end of the road for buyers hoping to find a bargain buy. ?For many months now estate agents have reported shortages of correctly-priced, good properties for sale. This shortage initially experienced in affordable areas is now spreading to more affluent areas, and sellers of correctly priced properties are, in most cases, achieving their asking price and selling reasonably quickly.? However, he says, while the property market is trying to break into an upward trend it still faces headwinds. ?Bank lending criteria remain strict and buyers generally need a deposit. The level of household debt relative to income needs to decline; savings need to improve significantly and households need to make the big adjustment to the sharp hike in rates and utilities tariffs. Therefore, it is likely that 2013 will be much the same as 2012 and the past four years. There will be months of excellence, well priced properties will sell quickly, and prices in some areas will inch upwards.?