Seeff comments on the state of the South African property market and what key factors buyers and sellers should consider.
Looking back on 2021, it was a good year for buyers. Low borrowing costs and favourable lending conditions saw many individuals climb the property ladder and upgrade their lifestyles by moving to new and improved homes and neighbourhoods.
The first half of 2022 showed similar trends. However, certain areas performed significantly better than others, which experienced a slowdown due to deteriorating economic conditions and accelerated interest rate hikes.
With uncertainty hanging over us as we near the end of 2022, Seeff is here to provide the insights and guidance that have made the real estate agency one of the most trusted in South Africa today.
The South African rental market has stabilised, with nominal growth in rental rates. This is good news for property investors and landlords looking for their next income opportunity. As summer approaches and tourists flock in, Seeff expects short-term rentals to grow in popularity.
Seeff suggests that property investors enlist the services of a property practitioner to take full advantage of these buy-to-let opportunities. A sensible investment is only as sensible as the person making it. The advice and experience of an industry professional are not to be underestimated if investors and landlords want to achieve the desired outcomes and profit.
Summer months promise higher levels of buyer activity, as South Africa’s beaches and sunny surroundings urge individuals out and about. Seeff’s property practitioners report that well-priced properties are selling fast and encourage sellers to get in touch with Seeff for guidance on navigating these property conditions come summer. After all, if you set the correct price, your property will be snatched up.
The South African property market might be relatively stable now, but things could change quickly. Seeff does not want buyers and sellers to be unprepared. There are two key factors to be aware of.
South Africa’s repo interest rate is at 5.5%, with the prime interest rate at 9%. While this is still below the pre-pandemic level of 10%, things could change in the near future. What does this mean for South Africa’s property market? High-interest rates could negatively impact the property market, as homeowners struggle to make monthly repayments, demand will slow, and landlords might have to sell off their property assets.
As for inflation, it accelerated in July. It is now at 7.8%, roughly a 5% increase from June. This is the highest inflation since May 2009, which rose to 8% during the Global Financial crisis. These increases are leading the Reserve Bank to signal interest rate hikes. However, Seeff calls on the South African Reserve Bank to keep increases to a minimum.
International conflicts, such as the Russia-Ukraine war, also put pressure on South Africa’s economy and property market. The Russia-Ukraine war is tied to South Africa’s rising inflation, climbing food and fuel prices, and financial instability. South Africa’s own corruption, government debt, poor service delivery, and loadshedding negatively impact the economy, too.
If you hope to sell your home amid these trying economic circumstances, you might be interested in this blog where Seeff shares tips for anyone selling their house. If you’re looking to buy a house, read this blog on what to look for when buying your first house.
The property market might be unpredictable, but one thing is guaranteed: Seeff will continue to share invaluable information to help buyers and sellers make the best decisions for their properties.