| With the interest rate at an all-time low – and expected to stay in the low single-digits for some time to come – South Africans are making the most of the opportunity to gain a foothold into the residential property market, or to invest in larger properties. The thriving market is driven by a number of factors: “The market is strong. People are buying a lot of property, so we’re seeing a lot of volume. The property market is always affected by supply vs demand, and right now we have lots of clients able to invest into property as a result of the low interest rate. Properties are currently selling for less than their anticipated price as sellers scramble to secure sales. It really is a buyers’ market right now. Ratio of buyer inquiries to available properties One of the key indicators to assess the attractiveness of selling a property at any given time is the ratio of buyer enquiries they receive compared to the number of properties they’re marketing on behalf of sellers (measured over a rolling 7-day period). Simply: the higher the ratio, the more buyer interest there is.
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Continued shift in homeowners’ priorities This massive increase in buyer interest was spurred by a shift in homeowners’ priorities. “Almost overnight, people needed more space to work and school their children from home; bigger family areas, kitchens and gardens became sought after; and people no longer had to plan their days around commuting. Many South Africans ‘semigrated’ from city centres to outlying areas to find homes that could accommodate these needs. Not only do the suburbs, and even rural towns, have this kind of space, they also offer more bang for your buck, which, combined with the falling interest rate, powered massive growth within a certain price range Conversely, the same time period saw many South Africans downscaling due to financial constraints caused by lockdown. The upshot, says du Toit, is that the residential property market burgeoned: “It’s safe to say that the property market is buoyant, even in an economic environment that continues to be volatile.” Seasonal patterns still in play The property market is seasonal, and buyer interest dropped over the holiday period at the end of 2020 but had recovered by mid-January, 1.39 enquiries every seven days per property on their books (an increase of 54% since July 2020). In March, this is levelling off to one enquiry per property every 7 days (an increase of 11% since July 2020 While they do expect to see a slight drop in buyer interest over the next two months, due to Easter and the school holidays, they predict a rapid recovery in June and July. “If you’re thinking of selling,” says du Toit, “May will be a great time to put your property on the market. However, while we believe that buyer interest will be high, it will be really important to price your property correctly if you want to sell it quickly.” Sellers need to remain negotiable We expect to see a strong buyers’ market continue well into 2021, especially in areas like Sandton, which, last year saw 33% of sellers, mainly in the suburbs of Bryanston, Paulshof, Sunninghill and Douglasdale, needing to reduce their asking price before receiving any offers. They also accepted offers of around 95% of their original asking price. Courtesy of Property24 | Marcel Du Toit - Lead Home
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