2023 - WHAT'S PROPERTY LIKELY TO DO?DO?
Category Residential Property News
Myles Wakefield, CEO of Wakefields Real Estate, chats about property in 2023, and what he considers to be the likely scenario.
As CEO of Wakefields Real Estate in Kwazulu-Natal, Myles Wakefield has a clear overview of how property has performed in Kwazulu-Natal in 2022. He's quite blunt about the surprises which the events of the year thrust on the market: "We didn't expect the interest rate to rise this much or this fast, we were caught by surprise by the global inflation, and we didn't foresee quite how resilient the top end of the market would be." For Wakefield, none of these came out the blue, they were simply more pronounced or speedier than expected.
With interest rates climbing as they have - and the chances of a continuation of that trend, albeit less aggressive - it's inevitable it would impact on the market: "Usually, the suburban market impact only reflects around six months later than the trigger, and that's what we're experiencing at the moment. From very little property stock, it's shifted quite swiftly to an increase in stock - not massively so, but noticeably. That impacts on property prices, and sellers who want to sell in the traditional three months, need to be cognisant of this slight downward adjustment. It's the standard supply and demand rule, and it means the price conversation has become important again."
Wakefield says: "Yes, it'll probably be tougher than we have experienced - certainly in the first half of 2023 - but unless we have a few calamitous events, I foresee a gradual slope, with recovery likely in the latter quarter of the year. I believe we're nearing the height of the interest rate cycle, and that - bar one or two smaller increases - the interest rate cycle will stabilise.
For Wakefield, sentiment is always a strong driver in the property market, and heading up to the ruling party's conference is a time of uncertainty: "A degree of certainty provides stability and shows a way forward. We need that.
"A positive right now, are our banks, which are extremely supportive of the property market. They've been steadily loaning money to qualifying South Africans, and that's imperative as our population grows and homes are needed. Many more people are being given the key to the door by banks, and that's a great sign on many levels.
"In the end, there are bigger pictures at play than the noise on social media. Of course there are challenges - some major, some minor, some perhaps as yet unknown for 2023 - but in the property world, we're currently seeing people from all walks of South African life, with aspirations to live their lives in the country - and they're doing it - with aspirations for a better school for their children - they're achieving it - wanting a less stressed lifestyle or longing to live in a greener suburb...and we're seeing all this playing out. Yes, we're going to be in for a quieter year in 2023, but barring anything unforeseen, we'll ride it out into calmer waters in the fourth quarter."
Author: Myles Wakefield | CEO
