As I write this Article the Covid-19 pandemic seems to have reached its peak in Europe and is well on its way to peaking in the USA. In SA we are coming to the end of our initial level 5 lock-down, which seems to have had the desired effect. However, I find it hard to believe we can simply continue with this strategy going forward as the economic ramifications are huge. We have also just been downgraded which adds to our burden.
In this article we will take a look at the pros and cons of being a seller and buyer and we will try and make sense of the market conditions that might emerge from the chaos.
The sellers
Two years ago, many of the private banks in SA were pushing the agenda for their clients to move their money offshore. At an unprecedented level money was moved out of the property sector and into the overseas stock exchange markets. This resulted in a major swing of confidence in the property market, especially at the high end. Unfortunately, due to these unforeseeable circumstances, some folk that took this advice have lost over 50% of their life savings. So, what am I trying to say, firstly don’t ever underestimate the concrete return property can offer and secondly your property still has a value and is probably the most important thing you own so don’t give it away!
“Post lock down we should see a further depreciation of around 10-20% depending on location and price range of the property.”
Last year the property prices over 3,5 million rand bottomed out between August and December, we have since seen a slow steady increase in the luxury property market. Properties below 3.5 million rand performed well last year and will certainly continue the trend. What this indicates is that before lockdown the value of the residential real estate was moving in the right direction. Post lockdown we should see a further depreciation of around 10-20% depending on the location and price range of the property.
What sellers should really consider is once you start pricing your property over the 3.5 million rand mark your buyers pool starts to reduce radically and in order to find that buyer, your property is going to need to be competitively priced.
“A home is there to protect and shelter your family and has exactly the same effect on your wealth”
This does not mean you are going to need to give your property away, on the contrary property has once again proven how valuable and consistent it is as an investment, and one cannot underestimate the allure of living in a beautiful home during these uncertain times. A home is there to protect and shelter your family and has exactly the same effect on your wealth. Buyers out there now truly understand these principals and won’t let good opportunities pass them buy.
Tyson Properties has positioned itself as the market leader when it comes to advertising and showcasing property online, both through the existing property portals and social media. Our agents are trained to excel in this space, and this has been one of the many reasons Tyson Properties is the fastest growing real estate brand in the Western Cape. Effective marketing will be one of the most crucial aspects in finding the right buyer for your property in these new market conditions.
The Buyers – Welcome to paradise
The recent cut in the repo rate, property price correction of 2019, and the availability of good quality stock, both second hand and brand-new, make for the most opportune moment in time that one should not pass up. Property constantly offers fantastic returns when purchased with a bit of wisdom and patience, unlocking value over time.
If you are a buyer with a cash deposit even better, it will really put you in good stead to negotiate the best prices as sellers will find it more attractive than ever to have a serious level of commitment from a purchaser.
What to look out for in the marketplace?
- Properties that are in a good location that might need a bit of work.
- Properties that sit on a large erf with potential options to subdivide at a later stage
- Properties that are close to good schools will have a huge demand in a few years from now.
- Some properties are situated in prime positions, but they do not capture the incredible view, if a properties view can be tapped into by building another level or knocking down old walls etc. one can add huge value to the property.
With more combined listings online than any of our competitors on the Atlantic Seaboard, Southern Suburbs, and the Western Seaboard, Tyson Properties is a one-stop-shop for all your property requirements. Contact our agents to introduce you to the best the Western Cape market has to offer.
Tyson Properties has prospered immensely in the western cape over the last five years, this is thanks to the continued support of all our loyal clients. We want to thank you and wish you and your families a safe passage through this season ahead. We are all in this together and we have faith that we will emerge through this crisis as a nation stronger than ever.
God bless you and your loved ones.
Nick Pearson
Regional Director of Tyson Properties Western Cape.
