Positive market outlook driven by low interest rate
The outlook for the residential property market remains positive, driven primarily by the five-decade low interest rate which has come as a cushion against the economic fall-out from the Covid Lockdowns.
It remains one of the best times to buy property. Borrowing costs are down by 30% and the mortgage loan climate remains favourable. Another key market driver which has emerged as a result of the lockdowns, has been the desire for more space, better surroundings and convenient opportunities to spend more time outdoors.
Consequently, buyers have taken the opportunity to migrate to areas where they can find better lifestyle opportunities. The trend includes higher demand for suburban homes and lifestyle estates and a migration to smaller towns, especially coastal towns on the KZN North and South coast, the Garden Route and Cape areas from Hermanus to Langebaan and beyond.
Technology and applications such as Zoom has enabled people to work remotely from just about anywhere. This has been a major boost for coastal and smaller inland towns, spurring the concept of so-called "Zoom Towns".
Buyers get to enjoy a healthy lifestyle, yet still with access to great amenities, schools and other facilities. These coastal towns are no longer just places that people would holiday or retire in but have emerged as hotspots for residential and second home buyers seeking a quality lifestyle.
Buyers do not just get lifestyle benefits, but these towns generally offer relative proximity to airports for those who need to commute. There are great schools including private schools in some instances along with sport and leisure facilities, medical care, shopping and services.
Statistics out of the USA show that buyers are not just investing in a great lifestyle, but these "Zoom Towns" are among the best performers in the property market. The upside for buyers right now is that there has probably not been a better time to invest in coastal property in SA.
Buyers are able to find excellent value and depending on the price band given that price growth has been subdued since 2017, especially in the upper price bands. In the luxury categories, buyer may also find sellers who are more amenable to negotiation depending on their motivation to sell.
Despite the economic challenges, South Africa offers an excellent value proposition. Aside from the scenic beauty and affordable cost of living, property prices including those of coastal properties are still among the most affordable in the world.
Investing in real estate now means you can benefit from future capital growth. Coastal real estate markets offer a variety of opportunities. Aside from residential, second homes and retirement, most of the towns have buoyant tourist markets. This means that once tourism recovers, property owners could again capitalise on rental income.
Samuel Seeff
Chairman, Seeff Property Group
Quote:
"Seeff has accelerated technology in the space of a few months which might have taken years and agents can now assist customers, whether face-to-face or digitally efficiently and safely."
14 Apr 2021
Author Gina Meintjes
