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South African property market strong into the new year

While it does not have an extremely large amount of influence on what happens in other areas of the continent, the South African economy is nevertheless the dominant one in Africa and all signs point to the housing property markets to continue their strength well into the New Year.

Housing prices in South Africa rose by more than 10% in 2007 and even when adjusted for inflation there was a very strong positive growth in property values across the whole country. In fact, just in the city of Johannesburg alone there was a net rental yield of 8.95% when adjusted for inflation and that is a very impressive number considering the absolute collapse of housing markets in many of the other developed countries internationally.

One can actually make an argument that the South African housing market is more robust and will rise in a manageable and sustainable way in 2008 much more so than other housing hotspots in the world. In Dubai, for example, while demand greatly exceed supply at the moment there are a number of projects set to be completed in 2008 and 2009 that could lead to oversupply problems and a sharp decline in the overall housing market in that Emirate. The same story is true for much of the Middle East.

In a place like Pretoria however, housing overturn is going at an extremely steady pace with a sustained amount of demand from buyers nearby and a sustained amount of supply being added to the area as new people purchase land and begin construction.

This has many of the property analysts in the area thinking that property returns within places like Pretoria, Johannesburg and many of the other areas of South Africa will be steady and without the worry that might come with a purchase in other property hotspots with uncertain futures in 2008.