Perfect Storm Ahead for South African Home Buyers Due to the Coronavirus

Many analysts expect that the economy will be weighed down by the post-lockdown recession, but it may prove to be a boon for the property market according to Samuel Seeff, chairman of the Seeff Property Group. 

He believes that there will be a pent-up demand in the primary residential market when the emergence phase begins. He went on to say that he expects there to be a perfect storm for homebuyers once we emerge from the lockdown with buyers eagerly waiting to take advantage of the market conditions, especially in the R1.5 million range and even up to R3 million in some areas. 

The purchasing conditions right now are highly favourable. 

Across the board, transfer duty is down and as banks continue to compete there will be a favourable lending climate ahead. 

In March, the interest rate was cut by 1%, which means that buyers could save between R650 and R1300 per month on home loans of between R1 million and R2 million. This with the flat price growth means that buyers might be able to get into a property or suburb that they may not have been able to afford a year ago. 

Stock is up and after a long wait, sellers will be keen to sell, which means that buyers will be able to negotiate further discounts. 

Seeff has said that they have already done virtual deals at some branches with a price agreed, but the offers are subject to a physical viewing. As soon as the lockdown lifts, agents will be able to move on these potential deals. 

On top of this, there should be a encouraging boost for foreign buyers as the rand depreciated, which means these buyers will get more value. 

However, Seeff said that there probably won’t be a flood of buyers.

Covid-19 has caused an economic fall out, which means that the demand for second homes internationally may mean that there isn’t an uptake in sales above R20 million or any foreign sales in the near future. 

The property market overall, will show both the challenges and the broader macro-economic trends in the country, but in the end, people will need somewhere to live. Those that want to buy will and will have plenty of motivation to do so. 

Article Source: https://businesstech.co.za/news/property/388567/the-coronavirus-has-created-the-perfect-storm-for-south-africas-housing-market/