The relaxation and advancement of hard lockdown, combined with 50 years of low interest rates and zero transfer taxes paid on real estate up to Ran 1 million, has resulted in high interest rates and significant increases. Increased activity of first-time buyers – Some were previously rented, but now we are finding an affordable and engaging opportunity to build a foothold on a real estate ladder.
This is according to Dr. Andrew Golding, Chief Executive Officer of Pam Golding Property Group, said: In today’s environment, millennial buyers can enter real estate and suburbs that they might not have been able to afford a year ago.
According to FNB data, young buyers (under 35) account for 43% of home sales, up from 38% in 2019, according to Deeds Office data.
Increased demand for accommodation to buy, primarily in the “young” buyer population, has a spillover effect on all sectors of the market, causing inventory shortages in high-demand areas and facilitating activity in the residential real estate market. I am.
Aside from enabling future ownership, if properly managed, home ownership is one of the best ways to generate wealth and plays an important role in economic transformation in South Africa.
According to Lightstone, most first-time buyers enter the residential real estate market in the price range of R7,000,000-1.5 million, rather than in the cheaper valuation range. Both first-time buyers and repeaters mainly want three bedrooms and two bathrooms. Most first-time buyers are women and most repeaters are men.
Sectoral ownership and real estate tend to provide better security and are particularly attractive to female buyers as this steady rise in women’s purchasing power is shaping the local real estate market.
According to Oba, the proportion of first-time homebuyers has steadily increased since late 2007 (data available), and the proportion of first-time buyers in recent months has clearly accelerated, 5 In May, it temporarily reached a record high of 56.2%. Year – The underlying trend continues to rise.
Oba also said that the average first-time buyer approval rate from January to October 2020 was 80.1%, with an average of 80.0% for 2019 as a whole. First-time buyer approval rates in 2016 were only 68.5%, reflecting significant improvements in recent years.
For homebuyers, the deposits that financial institutions require from both first-time buyers and repeaters are declining. Year-to-date deposits – The average purchase price percentage for first-time buyers was 7.0%, compared to 9.03% for repeaters.
Loan applications for 100% bonds have been steadily increasing in recent years, reaching a peak of 67.5% in June 2020 and then returning to 62.5% in October for the 10 months from January to October 2020. The approval rate for 100% applications is 80.4%. ..
Work from home:
Historically, “working from home” roughly categorized people into three categories. Self-employed professionals, young start-ups, and cottage industry entrepreneurs. For almost everyone else in the established business and corporate world, it meant a costly and time-consuming commute to the office every day.
The blockade was a social turmoil, but it also created a new approach to the way we work and, more importantly, where we are most productive.
The manufacturing and hospitality industries have no choice but to be centralized, but many now offer promising options. The underutilized spare room has been redesigned as a work hub. For young professionals and first-time buyers, a section title unit with an additional bedroom can be an attractive option.
For families, free-owned homes with good Wi-Fi connectivity in surrounding areas, elderly housing with care, or rural real estate solve the dilemma of choosing income generation over quality of life.
Buying real estate that requires deposits, mortgage approvals, and dual household income to process repayments means that owning a home is out of reach for the majority of young South Africans. did. This year, the market is moving positively, with the lowest interest rates in nearly 50 years, and a realistic outlook for buying rather than renting.
First-time buyers have found that unnecessary office and retail space must still be maintained, and the conversion to residential units is a win for both parties.
The ruined precincts after business hours are now showing signs of life as young people transform into smart, urban hubs.
This is a global trend as more and more people move into communal living spaces. Community, which is essentially communal, brings together a community of people who live in small personal spaces and share communal areas such as work areas and kitchens. The building is technology-enabled and equipped with a variety of facilities.
The main attraction of communal living is that people can live in areas where the traditional housing market could not afford. The sacrifice is that their private space is generally small. Communal living also provides flexibility with the generally available daily, weekly, and monthly stays (this is important during uncertain times).
Symbiosis also proceeds in some way to deal with loneliness, a serious social illness. According to a 2020 survey report, three out of five Americans are lonely.
HOMii, aimed at young South African metro professionals, is a local example. An app that allows users to book a stay in a building apartment in a major city that offers a coworking hub. No credit bureau or security deposit is required, but the lack of a lease agreement provides an accessible alternative to traditional leasing.
Accommodation options include single rooms and shared rooms with flexible options (every day to several months).
Gated Lifestyle Estate will stand out
Today, many people spend a lot of time working and studying at home, making homes more than sanctuaries, homes on safe land, and abundant and restricted safe open spaces. It has also evolved into a “quarantine bubble.” In addition to access, it also has a variety of facilities and is becoming more and more popular given the potential for future quarantine requirements.
Move to a secondary city or small town
FNB data show a sub-trend in which homeowners reassess their housing needs and preferences as a result of a blocked life, with some relocating to less crowded second-tier cities and smaller towns. I will.
For example, Port Elizabeth is the second hub with a safe and convenient lifestyle in an affordable coastal location. More and more of these places offer the convenience and quality of life of the city at lower prices.
The move to telecommuting in 2020 created another reason for South Africans to consider moving. If you can live and work anywhere, it makes sense to live in a place with a high quality of life and a cheap lifestyle and housing.
Sustainability becomes more and more mainstream
In pursuit of global sustainability, the number of eco-friendly homeowners and buyers of all ages is increasing, looking beyond the aesthetics of potential new real estate.
Energy and water efficiency and sustainable use of materials are at the top of the wish list, but there are long-term strategies. Buyers are also keenly aware of rising utility bills and instability in municipal service provision. As a result, their future homes are ideally off-grid and independent.
Rise of high-tech cities
According to a recent TechCities report by Savills, tech lifestyle cities are increasingly focused on health and wellness as they seek to attract talented people.
Cape Town, home to South Africa’s largest financial institution, is a relatively inexpensive flex-working or coworking space where fintech start-ups can take advantage of the city’s mature financial ecosystem to scale and attract attention. Is equipped with. Among emerging global technology candidates.
According to Invest Cape Town, nearly 60% of the country’s start-ups are in Mother City, and venture capital investment in Cape Town increased by 147% between 2016 and 2019.
According to Savills, top Tech Lifestyle Cities are sought after by technicians today for high air quality, access to green spaces, a small geographic footprint, high-speed broadband speeds and affordable vegan burgers. We provide services and products. At the Savills Digital Nomad Essentials Index.
“The fact that interest rates are so low that banks are trying to help people keep their homes, such as on payment holidays, rather than regaining their homes, means that the market isn’t flooded with excess inventory. Golding said financial pressure increased sales.
“The full impact of the blockade on the economy has not yet been felt, as the economy remains sluggish and business closures and unemployment may increase.
“Interest rates are expected to remain at their current lows until at least late 2021, which remains positive for the market. However, as the government seeks to curb debt levels, the national budget for 2021/22 I still don’t know if it will increase the tax burden. “
Pam Golding says prices are holding up better than ever expected, mainly due to the unexpected strength of demand from young buyers, coupled with the fact that few homes are on the market due to financial pressure. He said he would explain the reason. It is not yet known if this will last until 2021, Dr. Golding said.
“It’s not clear how telecommuting and office problems will be resolved in the long run, but it seems that the overall population is somewhat freed from being completely tied to the office. This was previously the workplace. It means that many towns and suburbs that were far from homes and schools and offered more affordable accommodation are now feasible for homeowners. “
Dr. Golding said the pandemic did not bring new trends in many ways, but significantly accelerated existing trends such as the transition to online, remote work and coworking.
“Health risks remain a concern, but the fact that more and more households are made up of singles and people are more likely to work from home is a need for the community. It has the potential to promote a tendency towards collaboration and communal living.
“The massive damage caused to the economy by the blockade will take years to repair, but when balanced, the balance, while coordinated interest rate cuts appear to have attracted many first-time buyers to the market. May have created more flexible work and home lifestyles otherwise wouldn’t have bought a home. “
Read: Business Talk-Conversation with Dr. Andrew Golding
Trends to Know in South Africa’s Residential Real Estate Market – Present and Until 2021
Source link Trends to Know in South Africa’s Residential Real Estate Market – Present and Until 2021