Covid-19 has certainly thrown a spanner in the works!
On Our Side
We continue to see the impact of the five-week lockdown on the property market. The deeds office is still closed, and this has stalled all property transfers currently waiting to be registered, leaving buyers and sellers unable to move houses.
Given the projected downturn in economic growth and resultant financial hardships, we expect many new properties will come onto the market. With fewer qualifying buyers out there, this means sales volume will decline. At the same time, house prices are projected to remain at current levels for the next 12 months. This creates fantastic opportunities for savvy investors, who might be able to land a bargain, and discerning buyers, who will have less competition for their dream home.
We have seen that periods of volatility can create opportunities to generate great returns on investments. Looking back at the 2008/2009 global financial crisis (GFC), we noted the following:
- Between 2008 and 2009, property transfer volumes dropped by 28% in South Africa’s three largest provinces (Gauteng, Western Cape and KwaZulu Natal), but average sale prices remained stable during this time.
- In the following five years (2009 – 2014), there was a big increase in the overall market size. It expanded by a whopping 14% per year – way above our inflation rate of ~4%.
We anticipate a difficult 18 months ahead. However, there will be pockets of real opportunity out there, so keep your eyes peeled. We also look forward to aggressive market recovery from 2021 to 2024, when sales volume and prices are expected to rise.
And Looking Forward To
Everything we do and build is to give you the best possible experience and service. So, during this challenging time, we want to ensure that all homeowners get the best possible deal when they sell or let their properties with us. In the next two weeks, we will be announcing details about our new transparent pricing model.
In the meantime, our real estate agents (or Local Property Experts as we call them) are here to help connect you with the right opportunity.
Please stay safe and healthy, and give your loved ones a big hug!
Marcél du Toit
PS. I hope you enjoyed this update! Please feel free to get in touch with me if there is anything we can do to make your property journey better.