Residential Property Indices - 2019
South Africa - Lightstone
The residential property market has been in consolidation for a while now through the presently slow economy. In 2019 the market closed with an annual inflation rate of only 1.7% at national level. This is due to the observed low market activity as buyers find it expensive to buy property in this economy.
In January 2020 the Monetary Policy Committee (MPC) announced a reduction in the benchmark interest rate by 25 basis points to 6.25%, and that is positive news for the consumers’ budget. However, this is not enough to offset the rise in fuel costs, electricity and other basic utility rates, and further stimulate market activity. We therefore expect the market to remain in consolidation with a good chance of lesser growth and activity.
As the market currently stands, we see the slowdown across all segments. The western Cape, whose property market is hugely dominated by the City of Cape Town municipality, has had a long streak of unrivalled performance but the recent slowdown has seen it join the rest in consolidation. It has been and still is the best destination for semigrants but the sentiments are slowly changing due to rising crime stats, the recent water crisis, local government uncertainties and looming competition along the east coast.
Our inland municipalities Ekurhuleni, City of Tshwane and City of Johannesburg metros are growing stably at rates between 0% and 3% whereas the coastal municipalities are generally performing above this range. This relationship extends to all coastal and inland properties as shown by their respective indices. The Low and Mid value wealth segments continue to buck the trend by growing at more than 4% annually whilst the rest are inflating at rates below that.
LightStone Residential Property Indices January 2020
Portals to be at the heart of house buying reforms
UK - EstateAgentToday
Rightmove and Zoopla have been working with key figures from government and the agency and conveyancing industries on how to reform house buying.
And it appears that data which agents supply to all major portals may be the foundation of major reforms to the house buying process being considered by the Ministry of Housing, Communities and Local Government and its partners.
Estate Agent Today has already reported extensively on a body called the Home Buying and Selling Group, which has been meeting for almost two years to consider how greater upfront information can be supplied to potential buyers by sellers.
This is likely to be through something called a BASPI - Buying and Selling Property Information - which would replace the current TA6 Property Information Form and would be completed at the point of property marketing, and be accessible to potential buyers and mortgage companies which may be able to pre-authorise lending on a property.
Rentvesting to become a reality in SA property market
South Africa - Property360
They call it rentvesting, a label coined by millennials as they find disruptive ways to climb the property ladder.
It is well-known that this generation demands convenience, instant purchases, and being able to have access to what they want when they want it. The same is starting to apply in property where the market is experiencing a surge in rental activity.
Marcél du Toit, CEO, Leadhome, says that while millennials have started to impact the property market significantly abroad, South Africa can expect to feel the effect within the next five years: “Millennials are opting to rent because it is typically less maintenance and offers a convenient lifestyle. This automatically changes what we would sell and the structure of the property itself. You would need a property that has some kind of mixed-use spaces for optimal customer engagement. Think work, life and entertainment all on the same real estate.”
Further to this, rentvesting has added additional complexity, as noted in Australia where millennials are opting to purchase and rent out properties in up-and-coming areas while choosing to live, and rent, in their preferred location.