Real estate agents believe this should be a good year, especially for buyers. But sellers too could benefit, and semigration is likely to continue to coastal areas as more people work from home
Last year’s late surge in property momentum is expected to continue where it left off in 2020 with interest rates still in buyers’ favour.
Sellers could also get in on the action. If buyer interest holds, says Herschel Jawitz, chief executive of Jawitz Properties, real property price growth in excess of inflation will be seen for the first time in a while.
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But what else can we expect to see from this year’s property market? What home types will be considered “hot property”, and where will they be? And will we see a resurgence of semigration?
Real estate professionals outline their thoughts on just what can be expected over the next 11 months.
Property in demand
As expected, key buying trends will include homes with work-from-home’ space, nano unit apartments that offer cool lifestyle living in metro hubs, and a continuation of the downsizing trend from large properties to smaller secure homes that are cheaper to run, Jawitz says. From a rental point of view, the trend will be value for money.
“With a surplus of rental stock in a tough economy, tenants will be looking for extreme value for money, and rents will remain under pressure for the year.”
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In KZN there has been an increase in the demand for full-title houses as people spend more time at home and work from home, says Daphne Rhode, regional sales manager for the Rawson Property Group. There will also be “a definite increase” in first-time buying, especially among those who were previously renting.
With interest rates being so low, says Martin Rautenbach, franchisee of Rawson Constantia in Cape Town, buyers are snapping up properties, especially in the southern suburbs. Investors are also taking the opportunity to purchase.
“We also have Johannesburg parents buying properties for their kids close to the University of Cape Town areas but coming very low off the asking price.”
Increasing volumes of sellers are downscaling – “selling big and buying smaller”, he says, adding that investment properties, smaller budget-friendly homes, and those in good school catchment areas will be in demand this year.
Hayden Giger, growth head at FNB private bank lending, says there is a large supply of properties to let and so tenants have an increased range of choice at “very competitive monthly payments”.
“Part of the increased supply in the rental market is due to the low interest rate environment which is allowing a lot of tenants to become first-time buyers...”
For property owners, he says 2021 will see more home renovations as people look to improve their work-from-home and living environments.
Dogon Group Properties rental manager Odette Maartens says small micro-living and one-bedroom lock-up-and-go units have become very popular in Cape Town while, in the suburbs, more spacious apartments and homes are in demand as many people are still working from home.
Semigration
Lifestyle plays an important role in semigrants opting to relocate to the Mother City and coastal areas, says Craig Mott, Rawson Property Group’s regional manager for Cape Town. The coastal strip between Cape Town and Port Elizabeth, is “without a doubt one of the most beautiful parts of our country”. And many of the towns along the Garden Route are among the safest places to bring up a family and offer lifestyles that balance family, work-life balance, and outdoor activities.
“The KZN North Coast is equally desirable from this perspective, boasting proximity to two of the busiest ports in Africa as well as easy access to King Shaka International Airport,” Mott says.
“This attracted a multitude of entrepreneurs to the area, who are making the most of the excellent value for money and quality of life on offer, paired with abundant business opportunities.”
There has also been a rise in the number of “super commuters” – professionals who live in small country or coastal towns and commute to major business hubs during the work week.
“This, together with increasing remote work opportunities, has made it possible for professionals to look for property further away from the major cities.”
Maartens believes Cape Town and the Western Cape remain firm favourites among semigrants.
“This is due to the lifestyle they afford people – beautiful beaches, mountains, and good schools.”
While Jawitz agrees that Cape Town and KZN’s North Coast are the “obvious semigration destinations”, he notes that in a challenging economy, semigrants will start to look for coastal destinations that offer better value such as George and the Helderberg region of Somerset West.
Echoing this, Giger says: “With Covid-19 driving a large number of people to work remotely, places where one can work from have opened up, and so a lot of people are looking at coastal areas outside the traditional Cape Town and Durban metros.”
Areas to look out for
Jawitz says the most active segments of the market are – and will still be throughout 2021 – the lower-to-middle priced segments across the country.
“Even though we are seeing a more balanced market as demand has picked up relative to supply, it is still a buyer’s market with buyers looking for value as a key buying criterion. This ‘value’ means that position is not top of the buying list and that any area that offers good value will be appealing.”
He says these include some luxury areas such as the Atlantic seaboard in Cape Town and Atholl and Illovo in Johannesburg that are offering better value than in the past 10 years.
In KZN Rhode says Umhlanga and Ballito are still popular with up-country buyers as they boast pristine beaches, entertainment, restaurants and shopping while Umdloti has also seen an increase in activity.
In the Western Cape, semigrants and locals are using the low interest rates to buy in areas such as Rondebosch, Claremont, and Kirstenhof, all of which are family-orientated, Rautenbach says. Buyers are also taking their first steps on the ladder in areas such as Diep River, Plumstead, and Southfield.
Other areas to look out for this year are the southern suburbs – for those who can afford them – and the Northern Suburbs – for those seeking value for money, he says.
Maartens also highlights the Western seaboard as an area to watch.