Post-pandemic trends set to shape international real estate

As the global Covid-19 Pandemic started waning and global economies emerged from various restrictions and measures aimed at curbing the pandemic, the world was hit with renewed economic constraints resulting from the Russia-Ukraine War.

In particular, the war has impacted food and oil prices while supply constraints have been brought on by renewed Lockdowns in China.

Resultantly, where economies picked up in 2021 and looked set for a recovery into 2022, most global economies - including those of South Africa and neighbouring SADC countries - have seen a decline in growth while inflation has risen notably, and with that interest rates.

Seeff highlights the impact of the interest rate and other trends that will shape post-pandemic real estate markets globally:

Interest rates. The top driver of most markets has been the dramatic rise in interest rates as a result of high inflation. This has impacted demand for property which in turn has driven down prices in many markets which experienced above-average price appreciation during the pandemic-induced property booms.

Sustainability. COP27 has brought a drastically renewed focus on sustainable living and the need for renewable energy. We are likely to see a stronger focus on renewable energy in countries and cities, and a move away from fossil fuels and the dependence on oil, driven by the Russia-Ukraine War.

Off-the-grid living. There will be a stronger focus on sustainable home designs with more off-the-grid living. This will include a stronger focus on aspects such as home energy needs driven by solar and other renewable energy.

Second homes. The pandemic has renewed the desire to own a second home in a coastal or country setting, especially by those who work and live in fast-paced urban areas. It has also ignited the desire to travel. We may see the rise of smaller urban homes offset by investment in coastal and country homes.

Luxury growth. The pandemic already ignited the super luxury housing market globally and while sales volumes may slow down, investment into global areas are likely to continue forming part of High Net Worth investment portfolios.

Urbanisation. The trend towards urbanisation is likely to grow in developing economies such as those of South Africa and SADC driven by young people looking to migrate to the cities for better economic prospects. This will drive higher demand for housing in the cities.

Walkability. As cities become busier, public transport and walkability will become trendier in the SADC countries where urbanisation is resulting in higher traffic volumes in the bigger economic centres. Work-live-play suburbs where people do not need to travel as much will continue driving demand.