south african property market forecast 2020

Our beautiful country offers breathtakingly scenic landscapes and spectacular coastlines, vibrant cities and rural places of interest. South Africa - Economic Forecasts - 2020-2022 Outlook. Smart technology is starting to make its way into the South African property market. The live, work, play concept is also beginning to emerge in Durban CBD, with the privately owned company, HOMii Lifestyle launching its next phase of trendy, highly-secure and serviced apartments. 2020 Outlook Report - Australia Our assessment of the global and local economic trends that will shape Australian property market performance in 2020, and a series of predictions as to how we see the office and industrial markets evolving. Tourism is recovering after the drought and aided by an easing of visa restrictions and piloting of an electronic visa application system coupled with increasing numbers of direct flights, will bring more money, translating into economic growth and jobs, and more prospective buyers to the country. The recent introduction of micro-units in Cape Town CBD and surrounds is also a response to strong demand from first-time buyers who want a lock-up-and-go lifestyle and to enjoy downtown living. In this blog, Seeff unpacks five of the property market trends unfolding in 2020. It’s no longer a far-off prediction, but rather a phenomenon we’re seeing the effects of today. Yet despite the knock-on effect of the drastic load shedding measures, there remain a number of positive factors underpinning the housing market, namely the demographic dividend of a young population – including first-time buyers - fuelling property purchases and rentals, relatively low interest rates, affordability returning as prices correct, and a strong appetite for lending from increasingly competitive financial institutions – with ooba’s loan to value rising to 88.4% in October which is the highest level since the data series began in 2007. With a growing number of young people looking for accommodation and with people of all ages and incomes showing an increasing preference for smaller, more conveniently located homes – and with the existing stock of homes predominantly freehold suburban houses, there is plenty of reason for ongoing developments. Online shopping increased to 1.8% of total retail spend up, from 1.2% in 2016. Some might say that eco-friendly and sustainable living might just be the future of real estate in South Africa. Dr Golding outlines the group’s vision for 2020: While there will still be pockets of activity and price growth, the performance of the national housing market is likely to remain subdued. Demand seems to be slightly stronger, especially in the price band below R2 million, so the market could edge back into equilibrium and then we will start to see signs of an improvement in the market in the new year. Some of SA's priciest properties have already seen steep price cuts. It is in this space that people are trying to supplement their incomes from the growing SA tourism market. The median price of a sectional title home in ‘Toti this year was R750 000 while that of freehold homes was under R1.5 million. Following another year of tepid economic growth, and with the latest round of load shedding further dampening the economy and expected to result in a Moody’s downgrade early next year, where does that leave South Africa’s residential property market? Seeff takes a look at the top five trends that could influence property buyers’ decisions this year. This is the reason we are seeing more and more self-sustaining home solutions in the property market of today. Smart homes are becoming a top choice within the property market of today. Rode & Associates (Pty) Ltd. is a 33-year old South African firm specialising in real state economics, property valuations, property research, town planning and property consultancy. Real estate across the globe is an intersectional market. He said that house price growth could be expected to increase by 4.5% – 5% for 2020. Apart from the wake-up call from load shedding this month, increasingly people are looking to add energy and water saving features to their homes to reduce monthly utilities costs and enhance value, and climate change means that this will becoming a growing imperative, where affordable. This apartment in, Apartment living is growing in popularity and, Durban is also on the radar with billions being invested in inner-city rejuvenation projects. As the eco-friendly lifestyle trend is on the rise across the world, South Africans are paying special attention to minimalist and resourceful living. According to Lightstone, median prices of both freehold and sectional title properties in this region continued to strengthen in 2019 while activity remains relatively buoyant – which is expected to continue in 2020. This is likely to occur in new developments which include greater energy and water efficiency and alternatives to municipal utilities. Location. South Africa’s house prices fell 1.22% adjusted for inflation during the year to Q1 2020 (a nominal house price rise of 2.79%, according to ABSA). The age-old adage, “location, location, location,” still stands: in very popular suburbs, … This is one of the reasons property owners are switching to sustainable energy sources (apart from avoiding the impacts of load-shedding) and using mechanisms that improve efficiency in the home. Contact Seeff today to connect with an experienced and knowledgeable agent who knows the ins and outs of purchasing a property. A verification email is on its way to you. During South Africa’s worst previous recessions after World War II, residential property prices fell by up to 10%. Trend #2 - Short-term rental investment partnerships with family or friends Trend #1 – Environmental considerations and eco-developments While the overall number of new buildings may have slowed, growth nodes continue to experience demand and developers are responding in areas such as Pretoria, the KwaZulu-Natal North Coast, Krugersdorp, East London, Cape Town, the Boland – notably Stellenbosch and Somerset West, and Fourways, for example Steyn City. People are partnering with friends and family to create alternative income streams. Trend #3 – Smart homes and digital living 'Calm in the coronavirus storm' Follow the link in the email to complete the registration process. Many of these villages are highly digitized but are powered through alternative energy sources and have a strong focus on reducing waste and recycling. Developers are responding with a marked shift in new housing stock towards sectional title homes – although this is also a result of the shortage and cost of land – and mixed-use developments offering a live, work, play lifestyle close to places of work. Introduced this month (December 2019), and with a flight time of just 14.5 hours, the new direct flight between New York in the USA and Cape Town augurs well for tourism and foreign direct investment – as the USA has a huge luxury travel market - and according to Wesgro, has already resulted in an increase in forward bookings by US tourists to Cape Town for the summer season. In Cape Town, the rise of entrepreneurs and digital start-ups is also benefiting different areas. Continued demand coupled with limited land is resulting in densification, with single freehold homes being replaced by several sectional title properties, particularly evident in areas like Newlands, Claremont and other Southern Suburbs. Quarter-on-quarter, house prices increased by a meagre 0.11% and fell by 1.45% in real terms. The improvement of infrastructure such as MyCiTi also increases the appeal of outlying areas, such as along the Western Seaboard. Further to this, the 2021 British and Irish Lions tour will attract additional visitors to South Africa. To learn more about our latest five-year forecasts across mainstream and prime residential markets read the Autumn 2020 report here.. This page provides - South Africa Housing Index- actual values, historical data, forecast, chart, statistics, economic calendar and news. Macro-economic and political landscape uncertainty suggests that a cautious outlook for South African … Do you want to know what it would be like to live it up in one of the most prestigious suburbs and estates in SA? KZN’s Queensburgh sees ongoing demand for properties under R1m as families look to upsize, Retire in the Cape Winelands's Zevenwacht Lifestyle Estate for less than R1m, Sophisticated living in wrapped in luxury, 2020 Vision: Outlook and trends in SA's residential property market. It has also invested in transport infrastructure to improve the movement of goods and economic integration, connecting major economic centres of Johannesburg, Durban and Richards Bay, with improved export capacity via sea ports and its air cargo facility. One example where we are seeing this happen is with the popular third party rental app Airbnb, which allows travellers to rent people’s homes or apartments at competitive prices for specific times and days. This is underlined by the strong demand for more affordable homes in CBDs around the country, with a large percentage of young buyers in Johannesburg, Durban, Port Elizabeth, Pretoria, East London and Bloemfontein, and to a lesser extent Cape Town due to the cost factor. Durban too is on the radar for investment, with the announcement earlier this year of R62 billion being invested in inner city rejuvenation projects in the CBD in a partnership between local authorities and private business. The extension of the Gautrain will also be important in benefitting peripheries as it will make new areas more attractive as commuting to work becomes easier. Before we begin analysing what to expect in 2020 property trends, it’s prudent to reflect upon the South African property market as it stands at the end of 2019. It is hoped that economic growth will be slightly stronger next year, despite risks to the downside, so it is possible that 2020 may see a somewhat improved market than experienced this year – certainly as the market does appear to be in the process of bottoming out. Appliances, such as fridges, TVs, and stoves are designed with software that can be linked with personal devices and online accounts to adjust the home environment according to your specific wants and needs. Major investments announced during the SA Investment Conference include R6.5 billion by Rio Tinto in Richards Bay Minerals, R2.4 billion by Toyota SA in its Durban plant and the development of SA’s first Club Med beach resort on the KZN North Coast, reportedly valued at R1 billion. Climate change is one of the hot topics on the lips of many people these days. We are especially seeing this trend in the property investment market. The rise of new growth nodes – with retail and companies relocating to smaller nodes such as Claremont, Westlake and Somerset West/Stellenbosch becoming major growth hubs in their own right as it is possible to live in these areas without commuting to Cape Town. There are also signs that semigrants, who initially rented, are beginning to purchase homes, so while the semigration trend may have slowed to some extent, it is still having a positive impact on the property market in areas where they have relocated. Some investors who hold an increasingly bearish view, see South Africa’s GDP declining by as much as 10% in 2020 as a result of the lockdown. This has been a key driver behind the shift in housing in South Africa from freehold suburban homes to mixed-use precincts and developments, and the rise of shared, third spaces. Commercial Real Estate Market in South Africa - Growth, Trends, and Forecast (2020 -2025) Commercial Real Estate Market in South Africa is segmented by Type (Office, Retail, Industrial, Logistics, Hospitality, and Multi-Family) and by Key cities, urban-suburban and rural markets. By the end of 2017 retail sales in South Africa reached the R1 trillion mark for a calendar year. Property market 2020: Pandemic fallout creates perfect storm Covid-19 worsens housing shortage, fuels demand from cash-rich buyers and returning emigrants Thu, Dec 10, 2020, 06:00 Property is a serious business, so make sure you have the right professionals on your side who offer the most up-to-date advice at the right time. Young buyers remain a key positive for South Africa’s housing market, ensuring a steady supply of new homeowners as we have a ‘youth bulge’, with many eager to gain a foothold on the property ladder. “It is expected that South Africa’s residential property market will continue to maintain its resilience, reflecting the ongoing healthy appetite for property investment – … Commercial Real Estate Market in South Africa - Growth, Trends, and Forecast (2020 - 2025) Published by: Mordor Intelligence LLP: Product code: 925424: Published: February 1, 2020… The forecasts we provide are aimed at guiding our customers’ strategies as well as their investment and purchasing choices. This page has economic forecasts for South Africa including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the South Africa economy. Apart from CBDs and major centres, peripheries of key nodes will continue to enjoy spill-over of demand - for example, Cape Town’s Northern Suburbs benefiting from waiting lists in Southern Suburbs schools, and South Peninsula in Cape Town as traditional suburbs in the Cape Metro become too expensive. The range is below the central bank’s annual inflation forecast … SA's property prices will take a big hit from the coronavirus crisis - and high-end homes will be worst affected. This one bedroom apartment in, The Garden Route continues to attract semigrants from around SA. With household finances under pressure for the foreseeable future, the focus is likely to remain on affordability, value-for-money and cost saving – for example transport and utilities – for the bulk of the market, says Dr Andrew Golding, chief executive of the Pam Golding Property group. This market was already taking strain before the pandemic, and one forecast estimates that luxury homes could lose almost 20% of their value this year. The sectional title property market has grown significantly in the past few years. The FNB forecast is for a 2020 annual contraction of -8%. Investment Review South Africa 2019/2020 The economic impact of Covid-19 is expected to place downward pressure on rental levels and capital values across all market segments, and the trend is expected to persist over the short to medium term, as markets remain in a downturn phase. The KZN North coast area is highly sought after among home buyers and there are currently nine new developments listed in uMhlanga (Source: Property24), including 503 homes – 457 being apartments and 46 freehold homes. Tel. Also new growth nodes are becoming increasingly popular such as George and Pretoria East – the latter with a huge number of new developments underway, also Gauteng East and West, Midrand, the KZN Highway Corridor, Krugersdorp, Plettenberg Bay and Knysna. Everywhere you look, people are walking around with a Smartphone, tablet, or laptop in hand. Trend #4 - Self-sustaining homes Buyers tend to look for such features, in order to boost the value of their property and to improve their living conditions. Cape Town has been named the digital hub of Africa, with the CBD, Woodstock and Stellenbosch surrounds becoming home to a growing number of tech entrepreneurs and start-ups. by Norma Young 23-01-2020 14:01 Realistically, South Africa can expect more of the same in 2020 with house price inflation ending in positive territory but just barely above 0%. This corner stand in. People are moving over to solar-powered homes, making use of gas, rainwater harvesting systems and even growing their own organic veggies in the garden. The latter is set on the only available land that is zoned light industrial and commercial in ‘Toti, and will be the largest industrial development the area has ever seen – and is expected to create meaningful employment opportunities over a 20-year period. Residential Real Estate Market in South Africa - Growth, Trends, and Forecast (2020-2025) The Residential Real Estate Market in South Africa is segmented by Type (Condominiums, Villas, and Other Types), Key Cities, and Other Urban, Suburban, and Rural Markets. For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox. The Dube TradePort Special Economic Zone (SEZ) recently received the coveted 2019 UN Investment Promotions Award for performing exceedingly well in promoting sustainable investment in KZN and South Africa, particularly facilitating the investment of R1.3 billion by Mara Phones. Trend #5 - Growth in sectional title market Activity in the freehold market has strengthened in 2019, with 101 sales, the highest since 2016. December 9, 2020 admin Covid Property, Foreign Buyers, Property Prices, SADC Property Market While South Africa’s housing market continues its post-Covid lockdown bounce-back, driven by the low interest rate and favourable mortgage lending Meantime the deterioration of affordability in the sought after suburbs close to the mountain continues to benefit areas further afield such as Northern Suburbs and the Western Seaboard. We strongly urge you to update to a. Lightstone reports that 31% of recent buyers were young adults, suggesting that first-time buyers are attracted to the area. +27 (0)861 111 724. The prospects for the South African commercial property sector for 2020 remain stagnant, according to a new report by John Loos, Property Sector Strategist at FNB. In addition, the build-up period to the current recession was one of 7 years of broad economic growth stagnation, whereas the … Please note that you are using an outdated version of Internet Explorer which is not compatible with some elements of the site. Covid-19 an economy killer Amanzimtoti just south of Durban is also experiencing an economic boom with the planned construction of KZN Automotive Supplier Park in Illovo and the Kingsburgh Industrial Park. Keep in mind that these trends are based on observations, so they aren’t foolproof for every buyer or seller. Whether you’re buying, selling or renting a property in SA, it is important for you to keep up to date with the latest trends on the property market. The relative affordability of homes in the South, coupled with the lifestyle offering, suggests that it will continue to attract new residents and homeowners. Ecovillages are a rather seductive environment, where the focus is on sustainability, slow and low impact lifestyles and a strong sense of community. Congestion and the deterioration in affordability appear to be the primary reasons that semigrants began looking beyond the Cape metro market for homes along the Garden Route and KZN. These devices are not only for practicality, but they also carry snapshots of significant elements of our lives, such as our photos, contacts, calendars, and much more, but that’s not where it ends. House prices in South Africa have continued to ... boosting the demand in the property market. The key is to understand each trend in relation to your unique situation. According to Lightstone, both freehold and sectional title prices have continued to strengthen in Amanzimtoti in 2019, even as sales activity slowed marginally in the larger sectional title market. So it is quite possible that home owners who have recently bought houses with 100% mortgage bonds will by now experience negative equity (the market value of the house is lower than the outstanding mortgage bond), says Erwin Rode, MD of Rode & Associations, one of South Africa… It is also one of the large independent property valuation (real estate appraisal) firms in South Africa. One of the factors we believe could prove a boost for South Africa’s economy and ultimately even provide positives for the property market is tourism. 2020 property trends will build on everything we’ve seen during this year, and while there won’t be many surprised faces around our table, there are some interesting things to expect in the new year, and the coming decade. It is affected by several factors, each making an impact on how the overall market operates. Real estate across the globe is an intersectional market. Position as the tourism capital of the world: South Africa is consistently included in the top holiday … On-demand office space, e-commerce, inner-city gentrification and worker mobility trends have resulted in property investors exploring new models to turn a profit in the soft market. Before we begin analysing what to expect in 2020 property trends, it’s prudent to reflect upon the South African property market as it stands at the end of 2019. With each change in our socio-economic and political environments, there is a change in how properties look, how much they sell for, and which ones are in demand. This trend will continue, with areas such as Cape Town’s Atlantic Seaboard and City Bowl set to benefit most from Cape Town’s longstanding reputation as a prime global city, while semigration to the Garden Route, KZN and Boland in the Western Cape is ongoing. Trends shaping the commercial property market 08 Apr 2019. Among Durban inner city renewal investments are: the R400 million extension of the Durban Promenade, R2 billion mixed-use development on the site of the old Durban Drive-in, R44 million Rivertown Development, R2.8 billion retail mall and residential apartments, and R240 million water mains project in Mahatma Gandhi Road. However, this will not translate into a meaningful recovery until economic growth and sentiment strengthens, and there is an improvement in incomes and employment opportunities. Vacant Land / Plot for sale in Britannia Bay, Apartment / Flat for sale in Florida Lake, Vacant Land / Plot for sale in Fisherhaven. Copyright © 2020 Property24 - All rights reserved. There is strong demand for more affordable homes in CBDs around the country. Supply is slowing in response to weak demand, with fewer new houses and sellers keeping or removing homes from the market. With a reduced value of the rand, we could attract a significant increase in the number of visitors which would help build entrepreneurial attractions, accommodation and other opportunities within the tourism industry. Zevenwacht Lifestyle Estate on the Stellenbosch Wine Route, has launched 10 independent living retirement apartments at the limited release price of R994 900 - with no transfer duties payable. In KwaZulu-Natal, the introduction of direct flights between London and Durban by British Airways a year ago has resulted in an 11% increase in international passenger numbers in the year to September 2019 compared to the same period last year, bolstering King Shaka International Airport’s status as South Africa’s fastest growing international air gateway. This is likely to become a long-term trend which will gather momentum in the years ahead and we anticipate this will also become more widely adopted in lower income housing as there is a growing realisation that green homes can be more cost efficient to run. Not enabled friends people are partnering with friends and family to create alternative income streams to. Reason we south african property market forecast 2020 seeing more and more self-sustaining home solutions in the few. 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