Leading estate agencies are saying there latest sales figures suggest there is light at the end of the tunnel.
LEADING estate agencies say their latest sales figures suggest the light at the end of the tunnel for the residential property market may be closer than anyone thought.
Since the start of the Covid-19 lockdown, property experts have generally been cautious about predicting a market recovery post-lockdown. This was due to the weak economy, unprecedented high unemployment levels and reduced consumer spending, all of which suggest a long and slow return to healthy growth.
“After a long period of not being able to finalise any property transactions, we were hopeful for a small rebound when lockdown restrictions on real estate were lifted.
“What we didn’t expect was for June to be our best sales month in over three years, and the second-best sales month in the history of Rawson Property,” managing director of the firm Tony Clarke said.
He said that while a backlog of deals pending in May could have contributed to the flood of transactions finalised last month, the momentum had shown no sign of slowing.
“So far, July has been even busier than June, suggesting that the rebound is only just getting started,” he said.
And the boost in activity wasn’t limited to major centres.
Clarke said Rawson’s figures showed transactions in all regions and price bands picking up proportionally. Even the luxury market showed an uptick in activity compared to averages over the last year.
“Our busiest market segment is the under R1 million price bracket, which made up about 42% of our sales this June. The R1m to R2m range is our next most popular, making up 38.4% of June sales, with the higher price brackets comprising the rest of the month’s transactions,” he said.
He believed reasons for the higher activity included low interest rates, increased lending, and good value for money.
Herschel Jawitz, the chief executive of Jawitz Properties, said last week that “there is no doubt that the market has seen better than expected buyer and tenant activity post-lockdown than expected”.
He said, however, it remained to be seen whether this was pent up demand or whether there was a sense that this was the time to get into the market despite the health and economic challenges facing the country.
“Despite the rate cuts and positivity we are seeing in the market, there is the reality of the Covid-19 economy. The key will be consumer and business confidence, which are both at record lows,” Jawitz said.
Yael Geffen, the chief executive of Lew Geffen Sotheby’s International Realty, said: “We’ve already seen significant movement in the market since the sector reopened from lockdown and another rate cut is just the shot in the arm the sector and buyers need.”
Geffen said historically low lending rates could open up the real estate market to a massive number of first-time buyers who would not previously have been able to afford their own homes.