The end of the first quarter of 2021 has felt very different to the same period last year for all of us involved in the property market.
Last year the interest rates were about 30 % higher than now and business consumer confidence was at an all time low. Most potential buyers were holding off purchasing and sitting on the side lines in rental apartments & homes with many young families contemplating emigration.
Covid hit and BOOM our world has changed.....
We were forced home under lockdowns & quarantines. Many of us had to reinvent our daily lives and livelihood.
Job descriptions changed overnight and our decision making processes were forced to pivot.
Government dropped interest rates & assisted where they could with employee's and business's alike. South African's made a plan and new decisions were taken and different directions sought.
So to get back to property the following happened.... Many emigrations were cancelled or put on indefinite hold, as a result many homes were bought. Many long and short term tenants decided to take advantage of the low interest rate and slow reacting landlords and bought property.
First time buyer numbers spiked, bond business grew handsomely for the first time in a long time. Landlords slowly adjusted to the interest rates and adjusted the rentals downwards to keep good tenants who did not want to buy or to attract new tenants in a very competitive market.
Homeowners and tenants alike made choices to upgrade or downgrade or semi grate based on the new normal they faced. The property market did better than anticipated and as a result all of these important decisions which have been made due to this pandemic ... SO WHAT NOW FOR PROPERTY?
First time buyers are still active. The middle and upper middle segment of the market is recovering but we still have a lack of certainty on Government policy, as well as confidence in which direction South Africa is going.
Just imagine if against the tide we make smart decisions for South Africa as a country. We could all be on a path to renewed growth health and happiness. The alternative scenario is not something I wish to dwell too much on right now. Bring on smart decisions, vaccines for all, and harmony in the rainbow nation and you will see investment property rocket.
Stay safe and well
David Ingle