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www.thevillagenews.co.za
2 September 2020
MY HOME
Will spring herald a change in the property market? By Stephen de Stadler Managing Director Fine & Country Hermanus, Arabella and Kleinmond
A
s we come to the end of Women’s Month in South Africa, we need to on the one hand continue to pay homage to all the significant women in our lives, and on the other hand we also need to ensure that we continue to fight the ongoing gender-based violence in our country. The end of August also means that spring is on the way. It does not exactly feel like that, with snow falling on Table Mountain, the Hottentots Holland Mountains and other ranges in the Western Cape. The amazing display of wildflowers in full bloom along the West Coast, however, is certainly evidence of the changing season. During September we will also be getting back to a level of normality as the relaxed lockdown regulations allow the economy to open further and the country adapts to working in a new environment. But what is happening in the residential property market? Does the change of season herald a change in the market?
Traditionally, the onset of spring has always predicted increased selling activity in the Western Cape. It is as if the long, cold, and wet winter days cause people to effectively hibernate, and then emerge with the sun and look for new beginnings. Estates agents would be looking forward to a busy period of listings, negotiations, and closures. But this is not a normal spring. The whole world is emerging from a period of economic inactivity, the global scale of which has never been seen before. It is a brave economist who predicts the future with a great deal of assurance. But judging from what is happening in the international property markets, we should see a marked increase in activity, as the pent-up demand from an inactive lockdown period results in increased sales activity in the short term. If the effect of historical reductions in the interest rates is anything to go by, we should also see increased activity. However, some noted property professionals in South Africa are indicating that much of this activity is taking part in pockets of interest, whether regional or price aligned. Said differently, there has not been a national increase in activity across all areas of the residential property market. Your home is your most important asset, and usually your biggest expense. Your home is
also the asset that requires more emotional interaction when buying or selling, than is the case with any other possession. Generally speaking, it would be safe to say that the last few months since the country went into lockdown have probably been the most difficult time that most South Africans have had to endure. When one has been emotionally tested to the extent that so many of us have been, it is only natural that the first thing that comes to mind when life starts returning to a level of normality, is not necessarily the buying of a new home. You may be asking yourself: Where is this all leading to? Prior to lockdown, the residential property market was generally a buyer’s market. On lockdown Level 2, as we move into spring, this situation is unlikely to change and the buyer’s market will remain for some time into the future. In addition, it is likely that even more homes will be put up for sale and buyers will become even stronger as the number of properties on the market increase. Some of the positives resulting from the lockdown is that many companies have realised that working from home is a feasible option going forward, which could bode well for parts of the country that have not in the past been
seen as anything other than holiday or retirement destinations. If you can work from home, the distance from your so-called head office is irrelevant, as long as you have the ability to connect with your colleagues and clients reliably and efficiently. Lifestyle choices will thus become more relevant than travel distances. We can already see the positive effect of this on the number of vehicles on the roads to and from major cities during the traditional rush hours. Admittedly many industries still have to return to full business activity, but it is likely that more people will continue to work from home in the future. So, with apologies, the future is still unclear, but the buyer’s market will continue for the foreseeable future, with some areas benefiting more from lifestyle changes than others. What is abundantly clear is that well-priced homes are selling, whereas overpriced homes will remain on the market until their prices are adjusted to align with buyers’ expectations.
The views expressed above are those of the writer in his personal capacity and may not necessarily reflect the views of Fine & Country as a national and international brand.
