Property market … the good news story

    The property market remains a good news story for South Africa, says Andreas Wassenaar, licensee for Seeff Zimbali.

    In view of the uncertainty brought about by the Covid Pandemic, most businesses have shortened their planning and forecasting time horizons. If the current trend continues, the market could be in for a bumper year for home sales in the context of the current climate, he adds. 

    Seeff nationally and in various regions have experienced some of the best sales months. It seems that the demand for residential property spans the full price spectrum, with the lower end performing exceptionally well driven by the lowest interest rates in 50 years and even the top end recording several record sales.

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    To try and predict what is going to happen to house prices over the next 12 months and the likelihood of realising a sale for those people in the market, Wassenaar says it is advisable to keep an eye on the main drivers in the economy.

    The price of money and the growth rate of economic activity are two important economic indicators to watch. The SA Reserve Bank key policy benchmark Repo Rate has remained at 3,5%. It is potentially at the bottom of its curve with the expectation of upward movement over the next 12-months which will push up other interest rates, including mortgage rates.

    The CPI inflation rate climbed to 4.4% in April. The Reserve Bank has reduced the CPI rate forecast to average at 4.2% (down from 4.3%) for 2021 and retained it at 4.4% in 2022. An upward trend in CPI inflation is what will drive the expected upward move in interest rates.

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    Almost a year ago the Rand/US Dollar exchange rate peaked at over R19 to the dollar on the 23rd of April 2020. Since then, it has improved by around 25% which significantly impacts local inflation and the cost of transportation through the cost of imported fuel. Transportation costs filter through and impact almost every sector of the economy.

    The post-Lockdown GDP growth was not a pretty picture with the last three-quarters of 2020 recording annualised economic shrinkage rates of -17.5%, -6.2% and -4.1%. Overall, on an annual basis, the GDP plummeted by -7% for 2020, which was the biggest decline in 74 years - since 1946.

    That type of body blow to the economy has repercussions and the ability to bounce back depends on business and consumer confidence, productivity and employment rates, and gross domestic expenditure.

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    It is not only properties that South Africans are buying. Total vehicle sales rose 38.8% year-on-year in March 2021. Given that we went into lock-down at the end of March 2020, the more meaningful comparison will be month to month, and this also increased by a respectable 17.8% in March. Naamsa predicts that the overall new vehicle market will grow by 15% this year. 

    The property market remains grateful for the interest rate boost and resultant demand surge, but as agents, we remain cautiously optimistic when looking ahead given that demand for residential property is linked to GDP growth, without which the current levels of demand may not be sustained.


    An architectural marvel representing fine design and modern materials combined by master craftsmen, offering breathtakingly elevated views over multiple fairways. Spectacular living with an oversized TV lounge and on the lower ground level, a massive basement area ideal for a home theatre and entertainment space. One of the best golf-course fairway vistas from the main bedroom suite.

    Zimbali Coastal Resort is a premier lifestyle estate in one of South Africa’s most beautiful locations, boasting a subtropical climate and year-round holiday vibe. Amenities include a championship golf course and club, tennis and squash courts, gymnasium and fitness centre, communal pools, direct access to 3,5km of pristine beach, nature and walking trails, children’s playground and kick-about fields with cricket nets, a soccer field and more.

    5 Bedroom House For Sale in Zimbali Coastal Resort & Estate

    Author: Andreas Wassenaar
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