The South African property market is standing at an exciting crossroads and is poised to undergo significant changes, driven by new trends and consumer preferences over the next five years.
This is according to Pearl Scheltema, CEO of Fitzanne Estates.
Scheltema said: "As a nation, our housing market has continually displayed incredible resilience through economic ups and downs. Now it's evolving once again to meet changing needs."
The South African property market in 2023
The current R6.8 trillion valuation of the residential market as evidence of the economic importance of the property market.
Freehold properties dominate the landscape and make up 81% of the market followed by sectional titles with 12% and estates make up 7% of the market. This indicates a diverse range of housing options that cater to different needs and preferences.
According to Scheltema, house price inflation has been stable, with the low-value segment performing the best at around 4% inflation in 2023. This is in stark contrast to the highs of 37% inflation seen in the boom years of 2004/5.
Scheltema said that migration trends have played a significant role in shaping the property market.
The Western Cape, in particular, has emerged as a popular destination, due to the rising number of people moving to the province.
There has been a noticeable shift from metropolis living to small-town living, which indicates a preference for a slower-paced, quality lifestyle.
First-time buyers are leaning more towards sectional title properties, with their popularity rising from 31% in 2019 to 35% in 2022, according to Scheltema.
A large number of buyers are in the 36-49 age group, followed by people aged 50-64, which shows that there is a broad spectrum of age groups active in the market.
Predictions for 2024 and beyond
"We're seeing strong interest in the Western Cape, especially the Atlantic Seaboard areas like Sea Point and Camps Bay," Scheltema said.
The remote work revolution has people rethinking what they want from a home. From dedicated office spaces and easy access to the outdoors to slower-paced living, these are the new priorities.
There are has also been a shift in where people are choosing to live, as more South Africans are moving away from the big cities towards coastal towns.
Scheltema said: “They crave a higher quality of life with that small-town vibe. It's not just retirees anymore - young families and remote workers are part of this trend too."
Energy-efficient, eco-conscious homes are in high demand, as developers integrate solar power, green spaces and other sustainable elements from the start.
The Western Cape is seeing a diverse mix of buyers from across South Africa and overseas wanting to buy in the province. Some want their dream beachfront property, while others are making long-term investments.
Scheltema predicts that a continued blurring of 'home' and 'neighbourhood' will be a priority.
"It's not just about the four walls anymore. Vibrant communities with walking paths, parks, outdoor amenities - these are becoming just as vital for home buyers across all ages,“ Scheltema said.
Scheltema emphasises that this period of change creates exciting opportunities - but also potential pitfalls for those home buyers who are not prepared.
Interest rates, government policies, overall economic conditions, can make or break an investment, so partnering with a knowledgeable, experienced real estate professional is crucial.
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