The housing market was tough in 2023 as many estate agents saw a 25%-30% decline in sales and 2024 looks equally challenging, RE/MAX of Southern Africa CEO and regional director, Adrian Goslett, said yesterday.
“That doesn’t mean there aren’t opportunities to be found or success to be made in the year ahead,” he said in a statement.
For example, he said that in “one of the toughest years we as an industry have faced within the last 10 years or so”, and despite the high interest rate and other economic factors, RE/Max’s network grew by over 250 agents, while over 20 new franchises were opened.
Goslett said 2024 would likely be another challenging year and real estate agents would have to continue to work hard to close a successful sale.
“While I am hopeful there won’t be any further hikes, interest rates are likely to remain high over the year. Many economists predict interest rates will hold steady for the first half of 2024 and only expect to see a few interest rate cuts from the second half,” he said.
He predicted affordability would continue to be an issue, which meant the buyer pool was smaller than usual.
“Sellers will need to listen to the advice of their real estate professional and price the home fairly to attract a buyer in 2024,” he said.
He predicted the semigration trend to the Western Cape and other coastal suburbs would remain strong in 2024. “Sellers in these areas were likely to be able to attract higher sales prices than the sellers situated in the inland regions,” he said.
SA bond originator BetterBond shared some of these sentiments, and predicted that in 2024, there would be a sustained semigration trend and continued urbanisation.
Tired of a lack of service delivery, homeowners were also likely to continue investing in back-up power and water solutions, said Goslett.
“Homes with off-the-grid features are increasingly popular among buyers. If you are struggling to sell, investing in these features in 2024 might help attract more attention from buyers,” he said.
BetterBond also predicted that because of the tough economy, the trend towards communal home buying (where multiple people pool their financial resources to share the costs of homeownership) would continue.
“While we anticipate continued growth in certain regions – largely owing to semigration and development trends – challenges such as affordability, geopolitical uncertainty, and the broader economic landscape must not be overlooked. Thankfully, the local housing market has proven to be resilient and adaptable,” said Goslett.
FNB’s latest Property Barometer indicated reduced demand for housing, slower House Price Index growth and more properties being sold due to financial pressures.
Only Realty Property Group MD Grant Smeet said a defining factor of the property market in 2024 would be whether or not the MPC decided to slash interest rates.
He predicted the rental market to remain strong, as elevated interest rates had caused many South Africans to abandon the idea of buying and instead rent for the foreseeable future.
He expected also that home buyers would continue to prioritise lifestyle over proximity to urban areas.
Notwithstanding these factors, Smeet said there were deals to be had, as the number of distressed house sales coming to the market was almost double the rate seen in 2022. He said foreign buyers, which made up of 3% of residential property purchases last year, were likely to continue to muscle in on high-priced, good value properties in the Western Cape.