What is the Property market doing?

What is the Property market doing?

Category Property Markets

What's the Property Market doing?

The Bureau for Economic Research recently published their survey results, for other services, which includes property.

The general trend does not make good reading. There has been a general downward trend for the last fourteen years. The rest of the world has noticed this and as a result the rand/ dollar exchange rate has dropped from R7.11 to the dollar in 2007to its current level of about R16 to the dollar (and it has been much worse). 

The indices show that real estate volumes, selling prices and fees have declined. While employment has declined since 2007 it has remained relatively constant since 2010, if one ignores the impact of Covid over the last year.

The result is that in certain parts of the country real estate turnover in units and value have declined by as much as 40% to 50%. In order to attract buyers into their market, business owners have had to focus more on social media marketing to promote credentials such as safety, healthy living, lifestyle, education, health and connectivity ( not only internet but also air travel to the main business areas).

The Garden Route and certain parts of the Eastern Cape seem to be bucking the trend and generating healthy turnover. The buyers are predominantly:

1. Retirees from the "Big Cities" particularly, Johannesburg, Pretoria and Bloemfontein wanting to live at the coast and wanting to enjoy a more relaxed style of life;

2. Young business people who either want to work remotely from their office, or want to start a small business. Now that these towns are growing, small businesses are more viable.

3. More and more of the buyers are permanent residents as opposed to people buying holiday homes.

4. Young professionals wanting to work remotely. We have seen this trend for sometime now, but Covid and the lockdown has helped fast-tracking it.

Covid has put pressure on everyone and as a result buyers are looking for value. They research the market they are interested in and look for value. It appears that the Garden Route and Eastern Cape are still offering value. Buyers are looking:

1. To buy plots that they propose to develop, as a way to enter the market. We suggest buyers should look to buy houses rather than plots, as building costs are climbing, while older homes offer value.

2. To rent in an area before committing to buying. This has also resulted in investors buying  properties to let.

3. Most of the demand is at the lower end of the market. Stock of well priced homes below R2 million are in short supply. Seeff is always looking for properties that will attract buyers.

4. At the top end of the market buyers will pay up to acquire scarce well positioned homes.

Our Seeff offices in Kenton on Sea, Port Alfred and Bushmans have benefitted from the surge in demand for homes in this area. We have sold most of the homes that are well priced and continually look for new stock to offer our buyers. Each of the towns in the Albany district offers something special so we can make recommendations to buyers on how best to suit their needs and pocket. Please contact us at one of our offices if you are looking to invest in the area.

Author: Simon Oliver