A Fitzanne Estates property management agent recently shared property trends to look out for in South Africa as the year progresses. He noted factors that have an impact on the performance of the property market.
”There are big influences within the political, social, economic and technical arena. At times what happens in the property can be a reflection of whats’ happening in the economy.”
⦁ Political impact
Elections signal uncertainty which sees some reluctance by buyers to commit, uncertainty evokes unease. Purchasing property is a big decision that one has to take which must be coupled with confidence.
“Another political concern is the question of land expropriation, this means that buyers are very cautious while some sellers are very eager. While certain categories of land could be expropriated, the government of South Africa has not stated that it will expropriate residential property,” he noted.
⦁ The rise of property technology
More buyers are already searching for new homes online. Fitzanne Estates is anticipating continued growing throughout 2019. The use of technology within the property sector enables sellers and buyers to save time and money.
Various property online tools and platforms provide information, analysis, insights costs and comparisons. Technology is a wonderful factor that allows transparency and some competitiveness within the property sector.
⦁ Estate living for security.
Estate living is set to rise because of the safety and security offered by many Estates. Many South Africans are purchasing house within security estates. In Gauteng many estates homes are available and few new security developments are now being established closer to the major hubs within Cape Town. Estates prices are very high and are set to rise throughout 2019.
⦁ The sharing economy
Friends entering the property market together or buying to Airbnb will gather more momentum throughout 2019. According to a Fitzanne Estates property agent, “An increase in investment property and tourists set to visit the Western Cape is expected.
⦁ The caring economy
As the cost of living continues to rise in South Africa. Many parents who have some money to share have no choice but to help their children get into the property sector. Some assist with deposits while others buy property in their children’s names. While children also help their parents sell their property to downscale.
The increasing petrol prices and all-round living costs have added to the trend of sellers looking to down-scale in 2018 which we believe will continue in 2019, with sellers looking to live closer to work and school and cutting costs where possible.
⦁ Ecologically friendly housing
Many consumers in South Africa are always searching for ways to cut down on costs especially on household water and electricity usage. In 2018 many homeowners chose to invest in properties that have rainwater tanks and boreholes. This trend is expected to continue according to a local property expert.
⦁ Semigration and emigration
Due to the Western Cape water crisis. During the beginning of 2018, the semigration trend slowed down. A few people left their provinces and moved to Cape Town last year.
The dam levels are back up to the 70% to 80% region. Hence, in 2019 a high number of families from Johannesburg and Durban is expected to move to other provinces.
Sellers emigrating is another notable trend. The FNB House Price Index revealed that about over 7.5% of property owners are packing up and leaving South Africa. This trend is also set to continue throughout 2019.
The Fitzanne Estates property manager also shared the top 4 vital trends within the residential space that should be closely monitored.
1. Consumer confidence – Consumer confidence is essential and is positive, however, it has not yet resulted in the demand of residential property buyers. Hence, we have an over-supply of residential property. The main buying criteria is value of the property and features which include the size, place and condition.
2. The rental market – The rental prices and market are also expected to stay subdued. In the sectional title market there is oversupply of rental stock because of the high number of recently completed high-rise apartment blocks last year.
3. Access to finance – Access to mortgage bonds is expected to be favourable throughout 2019 as banks compete for business. Rate concessions to buyers, approval rates and loan to value criteria offered by different banks offer buyers options to get access to finance.
4. Property prices – Property price growth across most provinces is expected to remain subdued throughout the first half of 2019. Performance of the residential market in the second half of 2019 will depend on the outcome of the 2019 elections. Depending on the election results property, prices may increase or decrease.