THE residential property is set for another year of robust activity and shifting home-ownership trends following 18 months of unexpected recovery and rebound in the market, BetterBond chief executive Carl Coetzee said yesterday.
He said semigration is back in full swing with the Western Cape once again being the go-to destination; especially for middle-class Gautengers looking to relocate.
Recent data from Lightstone suggested that 35 percent of people moving provinces were going to the Western Cape, up from the 31 percent in 2020.
BetterBond’s application volumes for the 12 months ending November increased 27 percent in terms of applications from the Western Cape. Four percent of semigration buyers were moving to smaller but more expensive properties in the province, Lightstone reported.
According to BetterBond’s November applications, the average home purchase price in the Western Cape is up 3 percent. Semigration to the other coastal favourite, KwaZulu-Natal dropped marginally and the July riots appeared to have only a slight impact on semigration to this province.
Another trend was the persistence of demand for seaside living, especially as the hybrid working model allowed more people to work from home for periods. Lightstone reported in October that house inflation for coastal properties increased almost 8 percent, compared with below 6 percent for inland properties.
Pam Golding Properties chief executive Dr Andrew Golding said house price inflation nationally, after averaging 5.1 percent from January to October 2021, would likely average closer to 3 percent in 2022.
Coetzee said unlike 2020, which saw many first-home buyers, much of the market activity in 2022 would likely be from older repeat-buyers with the financial capacity to invest in property.
FNB had noted a shift in buying activity from younger buyers to those of 35 years and older, reflected in the decline in loan-to-price ratio, as these buyers were able to pay larger deposits on their bonds.
Another trend likely next year was that predicted single-digit interest rates would continue to encourage tenants to buy rather than rent.
“We see from the Absa Homeowner Sentiment Index for the third quarter that positive sentiment for buying instead of renting increased by 6 percentage points to 83 percent – the highest it has been since the index was launched in 2015,” said Coetzee.
Renovations were expected to remain a popular alternative for homeowners who were unable to invest in a more expensive property. This was reflected in the ongoing strong results from building and hardware materials producers and distributors.
Micro-living would remain a strong trend in 2022, as people moved back into the city centres.
With offices devoting greater attention to creating communal areas for better employee wellbeing, there would, however, be less need for larger inner-city apartments.
The proliferation of co-working spaces had also sparked a new trend called the “club concept”, whereby instead of being a tenant, one becomes a member of a community where kitchens and work spaces are shared, with access to other common spaces within the group.
“As the hybrid work model gathers momentum, we expect to see some return to city centres. However, as many people will only be spending a few days a week in the office, many will opt to settle in suburbs further away from work,” said Coetzee.
He said they also expected to see renewed interest in sectional title properties as people returned to work, and interest rates started to increase gradually.
Lightstone reported that the sectional title market on KwaZulu-Natal’s popular north coast had grown and now accounted for 56 percent of all property in that area. Similar trends could be seen in parts of the Western Cape, as semigration drives demand for accommodation.
edward.west@inl.co.za
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