Trends shaping the post-Covid property market
Category Market Update
As we head towards the end of yet another busy and successful property year for the Southern Suburbs and Constantiaberg, it is useful to highlight some of the post-Covid property trends set to impact and shape the property market over the next year.
The pandemic significantly impacted the market, most notably the 3% interest rate reduction which resulted in a property boom. With the economy and market fully opened and Covid-restrictions seemingly at an end, we examine some of the post-Covid trends and shifts that will shape the market next year.
Higher interest rate. It was always expected that the 3% Covid-induced interest rate reprieve would normalise once the pandemic subsides. Although the hiking cycle has accelerated due to inflationary pressures, the rate at 10.5% is still within the 10-20 year average and still positive for the market.
Buyers looking to negotiate. Due to the higher interest rate and fewer buyers in the market, buyers are not only well aware of the changing conditions, but are looking to negotiate prices. The impact for sellers will be that they should keep their price expectations realistic.
Favourable mortgage lending. While deposit requirements may increase into next year, it is expected that the favourable mortgage lending conditions will continue to support the market. This is great news for buyers and sellers alike.
Location is still vital. Covid has boosted the desire for a better lifestyle and convenience. This will be unique to each buyer, but it means that many buyers will now look for good neighbourhoods with proximity to amenities such as parks in addition to schools and other conveniences. Such properties could potentially fetch higher prices.
Work from home or work from anywhere. While slowing due to people returning to the office, high speed internet and fibre and changing work patterns will continue driving demand for features such as a study, studio, or workspace.
Security and community. Most buyers will continue looking for homes that offer security features and neighbourhoods which offer a more secure and community-focused lifestyle. A stronger focus on solving community challenges will add to the demand for certain areas.
Semigration and a better quality of life. We have already seen this manifest in an increase in semigration to the Western Cape, and Cape Town in particular. We are like to continue seeing more people looking to move to the Cape which will boost the sales and rentals market.
Property as a store of wealth. Contrary to expectations that property markets worldwide would plummet due to the pandemic lockdowns, property in fact flourished and became one of the leading economic sectors. It was also not just the lower price band buyers who took advantage of the low interest rate, but upper price bands also flourished, again affirming property as a strong store of wealth, especially in Cape Town.
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Author: Gina Meintjes
