A combination of all-time low interest rates, a prolonged buyer’s market, and an ongoing surge in first-time buyers make for an interesting residential property industry in South Africa, says Only Realty owner Grant Smee.
2021, he said, is driven by affordability, stability in the market, an increase in emigration and a lack of foreign buyers.
Smee said that there is a unique equilibrium at play in the residential property industry. “Properties over R2.5 million still operate in a buyer’s market because of the higher price point while properties under R1.2 million operate in a seller’s market.”
Adding to this, the majority home loan applications remain between R750,000 to R2 million.
Other residential property trends currently at play include:
Home is where the office is
“With the majority of the workforce still working from home, many are now investing in their homes to ensure that they are fit for both business and leisure.
“Finding themselves with a lot more time on our hands, some South Africans are also undertaking in home renovations and many are moving to new locations that can accommodate both their work and home life needs,” Smee said.
“To scale back on price and get more space, many South Africans are moving to outlying areas as they no longer need to be close to the office. Here, buyers get a lot more ‘bang for their buck’.”
Trendy areas are more accessible
Sought-after suburbs such as Rosebank (Johannesburg), the Atlantic Seaboard and even Sandton are now more affordable and accessible than ever. “Vacant offices are fuelling a surge in property developments and its an exciting time to be an investor,” he said.
This month, Balwin Properties made history by reaching R1 billion in sales in just 45-days at their new development in Sandton, Wedgewood.”
Remote working remains a key driver for relocation during the Covid-19 pandemic. Smee noted continued interest from buyers in provinces such as the Eastern Cape, Western Cape and KwaZulu Natal.
“Homes in the Western Cape are of particular interest with some sitting at price points that are still too high for local investors. These buyers continue to market to international investors.”
Co-living and micro-living on the rise
The need to reduce overheads in a volatile economy has led to a surge in the demand for co-living and micro-living spaces. “Co-living can consist of residents who rent beautifully furnished private bedrooms and sometimes a bathroom but share kitchens and other rooms and amenities,” Smee said.
“In most cases, co-living takes place between family and friends while micro-living apartments usually comprise of one bedroom, one bathroom and space-saving features that encourage minimalist living.”
Lifestyle estates in demand
A need for increased safety and security continues to drive young professionals, couples, and families to secure lifestyle estates. “Gated communities are always in demand and we are seeing new and exciting developments on the rise.”
Scooping up distressed properties in 2021
“Expect to see an increase in distressed auction properties across the price spectrum in 2021 as the realities of the 2020 lockdown materialise. For those looking for a steal or a fixer upper, this avenue presents exciting opportunities,” said Smee.
“Quality tenants are hard to come by even in the best of times. Be sure to conduct credit checks and ask for references. A full deposit is also of the utmost importance. To landlords with tenants who are struggling to make ends meet, try to reach a compromise and make sure that everything is in writing.”