A Buyer’s market
Let’s consider the current buyer’s market we find ourselves in, in SA. According to Lightstone, let’s consider the next 12 to 24 months. It is hazardous at best given all the complicating circumstances. Despite poor economic conditions and socio-political uncertainty, A buyers’ market looks at how low-interest rates have been a boost for the property market. And, semigration, buying up and safe living are providing areas of opportunity although first-time buyers appear to have lost some of their appetites.
24-month view of where we are headed
Lightstone also states that there are two primary factors to consider:
- Interest rates
- Economic growth
- And Socio-political developments
And all 3 of the above places in the South African property market, in a buyer’s market. But we have also all been overshadowed in the last 2 years with Covid-19. Covid has largely resulted in the low-interest-rate environment we find ourselves in. This is as the government seeks to combat the negative effects of the pandemic and lockdowns on an already moribund economy.
Where is the SA Property market now?
Even with the buyer’s market in SA, the residential property is edging towards pre-lockdown levels. Transaction volumes are still according to Lightstone, nearly 25% down on those recorded in 2008.
Let’s assess where the market will go. It’s useful to understand how the three drivers, above, will play. In the current state of play, we would like to see current levels get back to where the 2008 levels were. Economic growth as reported by Reuters reported that in September our economy only grew by 1.2% in the 2nd quarter. This is against the forecast of 0.7%. This is a better-than-expected outcome driven by sectors like communications, agriculture, and mining.
More about what places us in a buyer’s market
The weakened economic conditions are seeing a correlation with the rising unemployment which hit 34.4% in July 2021. This rising unemployment coupled with slow GDP growth suggests that the economy will keep underperforming for some time to come.
Reuters reports that GDP jumped 19.3% in the 2nd quarter. It reflects “a low base last year when our government shuttered much of the economy during a harsh lockdown.” Furthermore, our National Treasury estimates that the July riots could cut as much as 0.9% from this year’s economic growth figure.
Buyer’s market momentum
Economists believe the current property market momentum and the current buyer’s market will continue for 12 to 24 months. Also, fuelled by the low repo rate which the Reserve Bank said recently would remain unchanged at 3.5%, helped by a ‘friendly’ inflation rate. But, economists also caution that we could expect the repo rate to start to lift in 2022. This will make buying property more expensive. This will expose many buyers. And these buyer’s will simply not be able to afford higher interest rates and will put current property owners at risk of not being able to afford monthly bond repayments.
So many other issues to navigate
Add to these 3 primary factors, the socio-political factors continued decline in service delivery by many municipalities keeps nudging many homeowners into more permanent remote working conditions in favour of coastal or semi-rural living. Frankly, Covid-19 has all but accelerated this trend. It is still not fully understood the devastation that the recent unrest in KZN will have on the residential market. But Covid-19 was a wild-card. And we do expect to see a 4th wave later in 2021 or early 2022. Further lockdowns to stop the spread will be more devastating, economically speaking.
Where do we find ourselves now?
During the course of 2021, the property market has benefited from pent-up demand. This pent-up demand comes from our previous 2 lockdowns. The low-interest-rate environment has been particularly positive for the SA property market. Nominal price growth is up to around 4% (February 2021) compared to the same time last year. Primary growth is coming from specific segments of the market. But while overall sales volumes have declined, the total overall purchase price paid has increased.
What trends are we seeing in the current buyer’s market?
The Johannesburg property market still accounts for the most significant growth we are seeing in the property market. But we need a kick-start. We need to keep interest rates stable. If we can get Covid-19 comes under control over the next year and we are able to see the end of lockdown restrictions, Lightstone further outlines that the SA economy could gather some momentum on its own.
Families are moving into bigger homes to work from. Semigration is growing and becoming a formidable trend. Buyers are looking for bigger homes that can serve a dual purpose (live and work). Also, Lightstone further confirms that typically the coastal municipalities have a better performance track record. Buying a second home for families in SA is also contributing as a growing trend.
Buying up in a buyer’s market with low interest rates
The concept of buying up will continue given the low-interest-rate environment. First-time homebuyers are growing in numbers across the board, but this surge seems to be tapering. The biggest surge is evident in the growing numbers of high-value purchases. As well as second time buying which has also increased.
Where is the growth coming from and where is it going?
The growth is going to gated communities. This includes housing estates, sectional title developments. There is a significant trend away from buying Freehold properties. This sees sellers selling their properties and moving into safer, more cost-efficient gated communities. And further growth is expected in this segment in the months to come.
Sell your property in a Buyer’s market? Get in touch
Keller Williams Select is here to help. We have almost 1,500 agents across SA. You may say so what? Well, you see the KW Culture is the magic ingredient. All our agents adopt the KW culture by way of sharing. Meaning, we all have properties on the market that draw enquiries and viewings. If a property is not an ideal fit, we go out of our way to help you the seller, or your potential buyer to find a property that does tick all their boxes. This culture of sharing leads to quicker sales. And Keller Williams is # 1 globally across all fronts (agent numbers, concluded sales units, and transactional value. That’s a tall order. Finally, and honestly, our technology supports our culture, and our culture is what makes us the best at what we do.
Sign a mandate
When you sign a sole mandate with Keller Williams Select you are also giving us permission to market your property professionally and via almost 1,500 agents across SA. The process works. In summary, our KW culture works and you only have 1 agent to manage when you sell your property in Randburg.
Need a free property valuation
So, if you need a valuation done on a property anywhere in Randburg or elsewhere in SA, we can help. Give us a call on telephone number (064) 549-3123. Alternatively, drop us an e-mail at firstname.lastname@example.org. We have a vast network of almost 1,500 top Keller Williams agents at our fingertips who are all just dying for the opportunity to partner with you to sell and conclude your property transaction in record time.
If you want to view all the Keller Williams properties across the country click on our website to start the search for your dream home.
Need to read up on more articles that you may find valuable, be sure to read through some of our content and advice:
- Randburg property trends
- Property prices in Bromhof
- Property prices in Sundowner
- Trends and property prices in Boskruin
- Moving home to get your little ones into the best schools in Randburg
- Buyer costs
- Seller costs
- Keller Williams a true disruptor to the real estate market in SA
- Downsize your property?
- Properties for sale
- Selling a sectional title unit
- Avoid a bank repossession
- What goes into preparing an accurate property valuation?
- What’s my property worth?
- Do you need a free property valuation?
- The importance of setting the right asking price when you sell your home
- A Mandate and its Merit
- Tips when selling property in a buyer’s market.
- Sell your home fast but declutter 1st
- Tips when selling in a buyer’s market
- Homeowner tips when selling property – bathrooms definitely sell homes
- Tips when selling a property – Kitchens help to sell homes too
- Here are some tips to sell a property fast – Kiddie’s bedrooms
- Need some tips to sell a property – Master bedrooms
- Homeowner tips to sell a property fast – Lounge or TV room
- Need some tips to sell a property – Small but trendy home office
Get Pre-Approved Finance
Property Transfers and conveyancing
- Sell my house and let’s consider the process and the costs when you sell
- The Electrical Compliance Certificate
- Navigating a deceased estate
- Is your Offer to Purchase valid?