Property in 2020: It's all about the buyers
Category Property
Predictions about the likely performance of an industry are rife at the beginning of a year, and even more so at the start of a new decade. Jokes about 2020 vision into the future aside, one can't be blamed for wanting to know what to expect from the next 12 months, both politically and economically, as macro developments have a keen effect on everything that happens on the micro and individual level. As these factors acutely influence the property market too, it's useful to consider some of the trends that are likely to have an impact on the market.
Better for buyers
In all likelihood, the buyer's market that we had in 2019 will continue into 2020. This bodes well for anybody looking to purchase property, be it as a first-time buyer or those aiming to expand an existing property portfolio.
Anybody looking to enter the property market for the first time should take advantage of the current buyer's market. When supply exceeds demand, as it does in a buyer's market, buyers have a price negotiation advantage, which often becomes the decisive factor in a transaction.
Rental properties are also likely to remain in high demand across the country. In times of political and economic uncertainty, many people are more comfortable renting than buying, which bodes well for those looking to purchase property with the intention of renting it out.
100% and more
Another reason to take advantage of the buyer's market is the fact that many banks are extending the threshold for 100% loans to qualified buyers. In some instances financial institutions are offering more than 100%, which allows for the loan to include the attorneys' fees and transfer duty of a property, which is a significant help, particularly to first-time buyers.
Affordability remains key though and would-be buyers should ensure they can comfortably afford the monthly repayments, as well as the monthly rates, levies and maintenance costs associated with a property.
Safe as houses
Safety and security remains a key consideration for property purchasers across the country. Speaking to a fundamental human concern, the need for a home that's safe and secure is a key driver around the continued growth in the popularity of residential estates.
There are close to 7000 estates around South Africa, and many more likely to appear in the next decade. Buyers are drawn to the safety, but also to the sense of community these estates tend to nurture, as well as the fact that they are inclined to perform very well on the investment front.
Ladies first
It's been positive to see the number of females entering the property market climbing, with single females in particular commanding the market in the R800,000 average price range bracket. According to a Lightstone report, single females dominated property sales in 2017, 2018, 2019, with this trend likely to continue into 2020 and beyond.
The fact that this is happening despite a negative economic environment suggests that, as a country, we are making some progress towards reducing the wage gap. Anecdotally we know women to be smart, savvy and restrained investors, which benefits the industry at large.
Cautiously optimistic
While uncertainty about ongoing power cuts, poor foreign investment, stagnant employment rates and slow economic growth in general doesn't bode well for the health of the property market, we are cautiously optimistic. It's safe to take a 'business as usual' approach to property in 2020. That means making rational decisions about purchases and approaching your investment with patience and care.
Despite the challenges of the past decade, property has proven to be a resilient investment and wealth creation vehicle and we are confident this will hold true in the foreseeable future. And because the buyer's market is likely to hold, now is the ideal time to purchase your first property or expand your portfolio.
Author: BY: CARL COETZEE (www.bizcommunity.com)
