Property market surprises on the upside despite Covid-challenges
Category Market Update
Although a level of pent-up demand was expected coming out of the Covid-19 Lockdown, the market has surprised on the upside and has been buoyant across many areas, the Southern Suburbs in particular.
Buyers are still seeing property as a safe haven and they have wasted no time in taking advantage of the low interest rate and favourable mortgage lending climate. Cash buyers are also back in the market and taking advantage of the current favourable buying conditions.
The Rondebosch area remains in high demand for freestanding houses. I have been very busy in the with good sales activity and loads of buyers looking to upscale or upgrade to a larger house due to the need for more space to accommodate working from home. We are also seeing an influx of first-time buyers looking to get into the market.
As a result of the increased activity, I am now short of houses to sell and urgently need new stock. This is great news for sellers to take advantage of the current market demand to sell and perhaps also buy if they are looking to do so. New listings tend to attract some of the best interest.
In terms of where the market is at right now. FNB has revised their outlook for the market based on current data and market performance. Where they had expected prices to decline quite significantly, they actually reported a 1.4% rise in nominal prices.
Against expectation, there has also been no dramatic discounts offered by sellers although there is a level of negotiability, but this depends on the property, the asking price and motivation of the seller.
The bank also notes that its research shows that the market is currently 15% stronger than what it was during the weakest point of the financial crisis more than a decade ago. High demand urban areas such as Rondebosch and the Southern Suburbs in particular are expected to retain a level of resilience.
That said, FNB cautions that we are in uncertain times and while a "V-shape" recovery is apparent in the data, the real effects of the Lockdown are still to come which could prompt a slow-down in activity and result in a "W-shape" recovery. In other words, the market could take another dip before heading back into recovery mode.
While buyers and sellers should take advantage of the opportunities in the market, it is always best to work with an established area specialist who can provide the best guidance for the current conditions.
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Author: Gina Meintjes
