2024 property market predictions: Key factors revealed
Category Advice
Don't be fashionably late to the Real Estate Party. 2024 is poised to be an exciting time for homeowners. The tide is turning, and so is South Africa's property market.
READ: Home buying: Steering clear of common mistakes
Like a child taking its first steps with cautious optimism, South Africa is beginning to see signs of growth within its real estate market. This potential is expected to drive positive sentiment, bringing commitment and confidence back to the property market.
Multi-award-winning real estate company, Byron Thomas Properties, predicts the following significant factors on the horizon for the property market in 2024:
Interest rates are on the decline
Rising interest rates have resulted in a poor buyer market over the past few years with buyers either only qualifying for lower bonds, or not getting finance at all. The good news is that this is set to turn around over the coming year.
Interest rates are likely to start declining in the coming months and should continue to do so into 2025. This will lead to a marked improvement in consumer sentiment and buyer enthusiasm. South Africa should start seeing more investor buyers coming back into the market as finance will be cheaper allowing for better returns.
In recent years, the market has seen many buyers holding off on taking the big step into home ownership, opting to rent instead. With interest rates easing, many hesitant first-time buyers will soon be able to afford to buy their dream homes. This will directly affect demand and negatively affect the pricing of popular sectional title units.
Geo-political situation.
With the world in turmoil, South Africa's socio-economic issues seem like less of a deterrent than before. Emigration and semigration have slowed down, and many previous South African homeowners turned expats, are now returning home.
With more businesses requiring employees back to the office, areas situated close to ever-expanding business nodes, as well as in close proximity to top schools both private and public, hospitals, transport routes and major highways will remain in high demand.
New entrants into the job market will have a positive spin-off for investment buyers as demand for rentals should also start to increase, providing decent yields which have not been seen for a few years.
READ: Homebuyers: Property buyers' guide for 2024
Elections are the big talking point.
While the outcome of the upcoming national elections can't be predicted, the results are sure to usher in some critical shifts in power. These will have short-term effects on the property market, and longer-term effects on the South African economy. The upside of this uncertainty? Civil sentiment is quickly shifting towards positive outcomes emanating from political changes.
Infrastructure and costs
Suburbs seem to be going through short-term pain for long-term gain, with infrastructure upgrades taking place. New water pipes, sewer lines, potholes repairs, and electrical substations have been, and continue to be installed. While we would all like any form of outage to be a thing of the past, this will unfortunately not happen overnight.
The private sector also seems to be stepping up, with initiatives such as the 'Pothole Patrols', and improved community security surveillance.
Homeowners have taken power cuts and poor infrastructure into their own hands, installing solar/backup power solutions, boreholes, and water storage tanks including rainwater harvesting, reducing their reliance on municipal services while increasing their use and enjoyment of their homes.
Reducing reliance on the grid has its costs but also has its benefits. This is of course not first prize, but South Africa is not the only country facing infrastructure challenges, the grass may seem greener but there is no utopia anywhere in the world.
Stock levels are on the decline.
Looking at market trends from 2015-2017 (the height of the market over the past decade), the property sector experienced a 'sellers' market' where demand outweighed supply. Currently, stock levels are slowing which bodes well for property prices, with supply subsiding and buyer demand increasing. Interest rates in 2015-2017 were between 9,5% - 10,25% and forecasts indicate that South Africa is heading back towards those levels over the coming years.
There remains much that needs to happen before a complete shift from a 'buyer' to a 'sellers' market, but the indications are pointing in this direction which is very good news indeed.
Value for money and quality of life
Property prices are currently at an affordable level, offering great value for money and a lifestyle that is not easily replicated anywhere in the world. Many suburbs have introduced numerous community and security initiatives, making these suburbs safer in turn increasing the desirability. South Africa's suburbs are also alive with community initiatives and participation, as a move towards more civil-minded community action takes place.
The property cycle always turns. 2024 is expected to bring growth in the property market across both the freehold and sectional title segments. The time to buy is sooner rather than later.
Buyers, it is key to get your ducks in a row by getting pre-qualified for a bond. Get your transfer costs together so that when the right home comes to market you are ready to strike.
READ: Top 7 items that get damaged when moving and how to protect them
An article published on Property24 on May 25, 2022, features Ana Roberts of Just Property Upper Highway, who explains that another great benefit of downscaling is that small spaces require less furniture - a few great statement pieces allow for simple, minimalist décor and a beautiful, welcoming home at a fraction of the cost of furnishing a big house. And the cleaning is a breeze!
Less clutter equals less stress, and isn't that what we are all looking for now?
Tips for cosy-home hunting:
Location, location, location - You want to remain close to your family and friends, and have ease of access to stores and other amenities such as doctors, hospitals etc. Narrow your search to areas that tick these boxes.
What are your deal breakers? Does the home offer the main assets that are important to you, for example, a good kitchen, nice family space, shower etc?
Current wants vs future needs - If you are downsizing because the children have moved out and you are getting older, consider a single story with the ease of access rather than a property with stairs that may cause a problem later.
Growing pains - Will you be able to handle the upkeep of a big garden, or is it time for something smaller that is more manageable? Will your pets cope with a smaller space; is there somewhere nearby where you could walk them?
Fit for purpose - Will your favourite furniture fit in the new space? Make a list of every piece with which you can't part. Take measurements. Then take a tape measure with you when you start narrowing down your list of potential new homes.
Storage war - Is there enough cupboard space in the bedrooms and the kitchen? Do you need outside storage too?
Peace of mind - Check the security features of each property you visit. Find out how safe the area is and what security is available. Ask the neighbours, chat to the local police, and phone a security company that focuses on the neighbourhood.
Guest appeal - Consider how many bedrooms you will need going forward - if your kids have all moved out of home, you may only need one spare room for when they or your friends come to stay.
Paper trails - Remember to ask for compliance certificates, even those that aren't required in your province (for example, gas installations and solar geysers should come with a compliance certificate - if something goes wrong and you don't have one, your insurers may refuse to replace the geyser, or cover damage caused by a gas issue).
Complex questions - If you are moving into a complex or an apartment, be aware that there may be the added expense of levies, clubhouse fees and/or security. Ask about historical escalation rates and request a copy of the body corporate rules (if applicable.)
Ask your neighbours if there are any noise issues, does sound travel through the walls and ceiling? How old is the plumbing, the lifts etc - upgrading such items is very expensive and you'll have to contribute. What parking is available for guests?
https://www.property24.com/articles/2024-property-market-predictions-key-factors-revealed/32054
Author: Property24