The South African residential property market in Covid times and what to expect
Category 3%.Com Properties
How the South African property market has changed and some insights into what the property market may hold in store for this year.
The Covid pandemic has had a widespread effect on the global economy and South Africa has certainly not been immune to the serious economic shock the virus has caused.
Some brief insights on how the residential real estate market has been influenced in South Africa:
Rentals:
Although there is still stable demand across the board, rental prices have fallen. This has been influenced on two different levels. Firstly, due to lower interest rates and cheaper conveyancing costs(transfer duty threshold increased) there are many people who were once renting who are now able to afford buying.
Secondly, there has been a demand shock in instances where tenants more vulnerable to pay cuts and retrenchment have been adversely who can no longer afford to rent. Further, student housing has seen dramatic changes due to universities and other institutions moving to e-learning platforms, where many students will now live at home as oppose to renting.
Sales:
Regarding residential sales, there has generally speaking been a different effect, demand is certainly up overall. Although price levels are not perfectly stable in across different sectors, as one would expect in times of crises. There is significant activity, and the tick rate of the market is lively.
Sectional title scheme properties have done better nationwide, whereas freehold properties have seen a much greater volatility in price levels.
The work from home culture has also increased the amount of people seeking permanent residence outside major cities, causing an increase in demand in coastal regional.
While there are many people seeking their "lockdown bargain" it should also be warned that major banks have predicted a significant rise in mortgage defaults for 2021. This will inadvertently lead to stricter credit applications even though interest rates are down.
With all that said, 2021 appears to be a year of high activity in the property market. Get in touch with us at 3%.Com Properties to take advantage of our expertise and guidance in finding the best suitable home for you in the current climate.
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This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)