Today's reports that fuel prices are expected to rise even further in October, largely due to the sharp rise in crude oil price, will definitely have an effect on the property market.
Sources are saying the department of energy published information today that the price of gasoline 93 ULP & LRP in Gauteng might increase by 26 cents per liter in the first week of October with the price of diesel expected to rise by 37 cents per liter.
Consumers who are already under financial pressure and in a price pinch due to food cost highs, transport cost increases, stricter banking lending criteria and other macroeconomic factors will feel it even harder.
The rental market might experience it directly as it is usually more prone to react to economic fluctuations. The difference usually comes in where people who rent are able to make changes to their financial situation by scaling down their home choices. Whereas a home owner’s process cannot be changed quickly.
The greater effect on the rental market in the past has been that the demand for rental properties close to business districts, schools and amenities also increases in an attempt to curb excessive transport costs.
The residential sale market is not usually susceptible to short-term changes like fuel price increases and decreases, however there are a percentage of buyers balancing on the decision whether to buy now or not who might be more hesitant to make a financial commitment now. However, short term cycles usually don’t play a major role.
Statement by Richard Gray
Harcourts Africa Chief Executive Officer