Covid-19 could reshape South Africa’s work landscape, and with it where many people choose to live, says data analytics company Lightstone.
While the full impact of the pandemic is yet to be felt, it is creating opportunities throughout the residential property market – and high up on the list is coastal property, the group said.
“Estate agents are reporting better than expected interest in popular coastal areas such as northern KZN and the southern Cape coast – and this mirrors a trend in other countries, where those who no longer need to be in the cities are opting for safer, more relaxing lifestyles in smaller towns or villages.”
“In turn, those who are relocating are creating opportunities in the cities for existing homeowners to buy-up and first-time homeowners to enter the market.”
While changing work demands are encouraging a new look at coastal markets, Lightstone said that all buyers are taking advantage of reduced interest rates – at a 50 year low – and the price correction which has been underway for some time in the residential market.
Lightstone said that total transfers were up in Q1, and the expectation is that Q3 will demonstrate the market’s resilience and show an increase on transfers registered compared to Q3 last year.
The dominant buyers in coastal markets are the 24-40 age group, marginally ahead of the 41-49 age group, but both are some way behind the 50-64 age group.
“The realignment of the work landscape and current sales activity suggests professionals are looking to move in greater numbers and this could help push grandparents still in the cities to move earlier than they may have planned,” Lightstone said.
“Professionals in their 40s and retirees are upsizing their coastal properties quicker than other categories. The biggest single jump at 16% came from the 50-64 age group, up from just 3% in 2019.”
At the other end of the market, lifestyle choices are pushing the more debt-conscious Millennials and Gen X buyers (24-40 age group) to downsize their homes in increasing numbers – from 8% in Q1 in 2019 to 25% in Q1 2020, Lightstone said.
Downsizing continues in older categories, principally due to children leaving home and financial considerations – and this is a trend that is likely to increase as the economic effects of Covid-19 continue for some time.
“The Western Cape remains the coastal region of choice for both first-time and repeat buyer purchases, although in both categories purchases in KZN grew by 4% in Q1 of 2020 over 2019, while purchases in the Western Cape fell by 3% in the first-time market and by 4% in the repeat-buyers’ market,” Lightstone said.
Lightstone said that the province remains the most popular choice across all categories of property – affordable, mid-value, high value, luxury and super-wealthy – but while transfers fell in each category in the Western Cape, KZN recorded gains in Q1 of 2020 in all but the affordable category.