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- In general, people are likely to liberate themselves somewhat from being tied to the office.
- This means that many cities and suburbs are now feasible for homeowners.
- There are eight trends in the residential market to watch out for, says the director of Pam Golding Properties.
Today’s low interest rates, some claim the lowest in 50 years, have improved the affordability of residential property in South Africa and offset the negative impact of the coronavirus pandemic on the economy as a whole.
According to Dr. Andrew Golding, CEO of the Pam Golding Property group, while house prices have continued to show positive growth in 2020, in real terms (adjusted for inflation) they remain in negative territory.
For him, this reflects an ongoing price correction in line with moderate national economic growth. The market segment of properties priced between R700,000 and R3 million has been the most active.
“Interest rates are expected to remain at their current low levels at least until the end of 2021. This is still positive for the market. However, it remains to be seen whether the government will increase the tax burden in the 2021/22 National Budget in its attempt to contain its debt levels, “says Golding.
“While it is far from clear how the work-from-home versus office problem will be solved in the long run, it seems that in general people will be liberated to some degree from being completely tied to the office. Once it means that many cities and suburbs, previously too far from work and schools and offering more affordable housing, are now feasible for homeowners. “
Golding identifies 8 real estate trends
Work from home
“The lockdown was a social disruptor, but it also led to a new focus on how we work and, more importantly, where we are most productive. While the manufacturing and hospitality industries have no choice but to centralize, many people now they have promising options, “says Golding.
“Underused vacant rooms are being redesigned as workplaces. For young professionals and first-time buyers, a sectional title unit with an additional bedroom is likely to be an attractive option. For families, a freehold home with good Wi-Fi connectivity in a peripheral area, a retirement village or a farm, solves the dilemma of choosing income generation over quality of life. “
First time buyers
According to FNB, data from the Bureau of Deeds shows that younger buyers (under 35) now account for 43% of residential sales, up from 38% in 2019.
Low interest rates, along with zero transfer tax payable on properties up to R1 million, significantly increased activity among first-time buyers, some of whom previously rented, but now find affordable and attractive opportunities to gain a foothold in the market. property staircase.
Additionally, in today’s environment, millennial buyers can enter a property or suburb that they might not have been able to afford a year ago.
Women make up the majority of first-time buyers, while men make up the majority of regular buyers. Sectional titles and real estate are particularly attractive to female buyers as they tend to offer greater security.
Positively for home buyers, the deposit that financial institutions require from both first-time and repeat buyers is declining, averaging 7.0% for first-time buyers and 9.03% for repeat buyers.
The conversion model
Buying a property that required a deposit, mortgage approval, and double family income to pay for utilities meant that home ownership was out of reach for most young South Africans.
The market has tilted in your favor. First-time buyers are finding that unwanted offices and commercial spaces have yet to earn their livelihood and a conversion to residential units is a win for both parties. Precincts that were deserted after office hours are now showing signs of life as young people transform them into smart city centers.
Coexistence
This is a global trend as more and more people move into living spaces. Essentially life in common, coexistence brings together a community of people who live in small personal spaces and share common areas such as work areas and kitchens. The buildings are equipped with technology and offer a variety of amenities.
The main attraction of living together is that it allows people to live in areas that they cannot afford in the traditional housing market. Coexistence also addresses loneliness.
Closed lifestyle farms
With many people now spending most of their time at home, working or studying, homes have become “quarantine bubbles”.
Homes on secure estates, with an abundance of safe open spaces and restricted access, as well as a variety of amenities, are becoming increasingly popular with those considering potential future quarantine requirements.
Second-tier cities and smaller towns
The FNB data shows an under-trend of homeowners reassessing their housing needs and preferences as a result of living in the house, with some moving to less crowded second-tier cities and smaller towns.
The 2020 shift to remote work has given South Africans another reason to consider semi-migration. If you can live and work anywhere, it makes sense to live in a place with a better quality of life and a less expensive lifestyle and / or housing.
Sustainability
A growing number of environmentally conscious homeowners and buyers across all age groups are looking beyond the aesthetics of a potential new property in search of planet sustainability.
Energy and water efficiency and sustainable use of materials top the wish list, but there is a long-term strategy. Buyers are also looking closely at rising utility costs and erratic provision of municipal services.
Tech cities
According to a recent report from Tech Cities of Savills, tech lifestyle cities are seeing a growing emphasis on health and wellness as they seek to attract top talent.
Top Tech Lifestyle cities meet high standards for air quality, access to green spaces, and have smaller geographic footprints while providing the services and products that tech talent seeks today, such as fast broadband speeds and a Affordable vegan burger, as explored on Savills Digital Nomad. Essentials Index.
According to Invest Cape Town, almost 60% of the country’s startups are located in Mother City, while Venture Capital’s investment in Cape Town grew by 147% from 2016 to 2019. Cape Town has become the “Best Cities for Remote Work”. on the travel website Big 7 Travel’s 50 Best Places for Remote Working in 2021.
