PROPERTY MARKET SURPASSING ALL PREDICTIONS
Category Residential Property News
When we all peered out at the world from behind our walls, we feared the worst. How could the property market withstand this? How would our sales consultants survive financially? What would our buyers and sellers do? Well, take a look...and be amazed.
Economically, it's been a fearful few months, but the good news is, that one crucial sector of the economy carried on carrying on...and that sector was, and is, property.
As Myles Wakefield, CEO of Wakefields Real Estate said, "At Wakefields, we expected one thing, and got another. South Africans not only continued to buy and sell, but did so with confidence, enthusiasm and in substantial numbers.
"The result? Record breaking months. That's not just talk, that's the proven reality across the industry.
"Sales in June and July 2020 were not only buoyant, but five of our branches had record-breaking months....and August is showing similar positivity."
Why, you ask? "We've analysed why, and there are a few clear, strong reasons," says Wakefield. "The extremely low interest rate, the release of pent-up demand over the previous fully lockdown months, and the banks' willingness to grant home loans."
It's safe to say that in most cases, that low interest rate has made it 'cheaper' to buy than to rent. So South Africans are choosing to buy.
The question will always be, is it a flash in the pan, or is it a trend likely to continue for a while. Rhys Dyer, CEO of bond originators, ooba, shared his thoughts: "ooba has been Wakefield's origination partner for over 20 years now, and it is extremely exciting to see Wakefields achieve their highest ever level of granted home loans in the month of July, especially given the timing during lockdown. The property market in KZN and, indeed, nationally has seen a surge in new home loan application volumes in July and also into August. These increased volumes appear to be driven partly by some pent-up demand from a reduced number of transactions in April and May, but also significantly by the lowest interest rates in over 50 years. First time homebuyers are leading the charge, with increased volumes of applications from first time homebuyers and increased requirements from applicants for 100% bonds. For now, banks approval rates remain strong, with approval rates having only dropped slightly from pre-Covid months." Looking ahead, Dyer added, "While the pent up demand is likely to dissipate over time, we do believe that lower interest rates will be with us for some years to come, which should continue to drive volumes."
One thing which is certain. The Covid 19 pandemic has thrown everything into disarray. It's caused a flurry of movement. For many people, movement has involved changing jobs and therefore location, down- or upscaling properties/living situations according to their altered financial situation, moving schools, and more. Movement stimulates the property market, and results in sales.
Interest rates have been low for some time, and as Dyer confirms, they're currently sitting at the lowest in just under 50 years. Wakefield summed up: "Looking at the global situation - a factor which clearly affects the South African economic situation - we, at Wakefields concur with Dyer's conviction that they're going to remain low for quite a while. That's good for the property market, and what's good for property, is good for the South African economy."
Author: Anne Schauffer
