Still strong potential for structural timber in South Africa

摘要

After years of spectacular growth, the residential property market in South Africa is now uncertain but there are opportunities for treated structural timber. Peace of mind and protection for a lifetime's major investment are the factors encouraging homeowners to take on-board the additional one-off cost of timber treatment. Indicators are there: a slowdown in demand growth, a stronger supply of new housing and a progressive slowing in the rate of increase in residential property prices. Growth in house prices is predicted to range between 12 and 15% in 2006 compared with a 20% in 2005 (2004 saw growth of 30%). Analysts say a repeat of the 1984 housing market crash is unlikely even if residential development growth does reach similar levels. The difference is that today's economic fundamentals are sounder-the economy is 53% bigger and housing growth as a percentage of GDP is far lower than it was in 1984. With the strengthening of the rand against the US dollar, inflation under control and the likelihood of stable interest rates and steady economic growth, the chances of a property crash are reduced. Some even say that new residential development can be sustained for the rest of the decade.