In 2018, a buyer’s market - fuelled by political and economic uncertainty, increasing petrol prices and rising household costs - meant many properties sat on the market for a while and potentially fetched lower prices.
What will 2019 look like? And what big trends can we expect?
Nardee Cotterell, Chief Operations Officer at PropertyFox an online estate agency says there are already the early murmurings of an improvement in the market, and this is likely to continue into 2019, “We are seeing a pick-up in sales, in particular for houses close to schools, major highways, business hubs and airports and we expect this to gather more momentum into the new year.”
The average time that a house spends on the market increased from 11.1 weeks to 16.4 weeks from the first to second quarters of 2018, with 96% of properties having to drop their price after listing in order to achieve a sale.
PropertyFox bucked this trend with properties selling on average within 4 weeks. Cotterell says the digital real estate agency is hopeful that the length of time on the market may begin to decline in 2019.
She says accurate valuation of properties has become critical and will remain a pivotal part of selling quickly in 2019. “PropertyFox is using tech to deliver an accurate valuation to clients through a sophisticated valuation algorithm.
This has resulted in our properties selling about four times faster than the industry average because they are priced correctly.”
7 TOP TRENDS IN 2019
The sharing economy
The trend of either buying to Airbnb or chipping in with friends in order to enter the property market will continue to gather steam in 2019. We can also expect a sharp increase in tourists and investment property buyers heading towards the Western Cape over the 2018/19 festive season, following the decrease earlier this year in short-term investments mainly due to the water crisis.
The caring economy
The costs of living continue to increase and with this, we’ve seen many parents helping their children get onto the property ladder either by assisting with deposits or buying in their name for their children to live in – or both. Likewise, we’ve also seen a lot of “children” helping their parents sell in order to downscale and retire.
Ecologically friendly housing
Again, with the high costs of living in South Africa, consumers are always looking at ways to cut down on costs where they can, especially when it comes to water and electricity in households.“We certainly saw homeowners investing more in this regard in the past 12 months, purchasing and investing in properties which have boreholes and rainwater tanks. Again, we expect this to continue in 2019,” adds Cotterell..
The increasing petrol prices and all-round living costs have added to the trend of sellers looking to down-scale in 2018 which we believe will continue into 2019, with sellers looking to live closer to work and school and cutting costs where possible.
Estate living for security
With the increasing demand of safety and security, there has been a growing popularity when it comes to purchasing houses within security estates. With only a few new security estate developments close to the major hubs in Cape Town, while many already exist in Gauteng, estate prices have and will continue to rise in 2019 with the added demand versus supply.
Semigration and emigration
The argument continues, which is better – Cape Town or Joburg? During the beginning of 2018, the semigration trend slowed down with fewer coming down to Cape Town, due to the Western Cape water crisis. However with the dam levels back up in the 70-80% region, we expect to see the number of Johannesburg and even Durban families moving south start to rise once again in the early months of 2019.
Many of these families who are planning to semigrate will be looking to purchase homes within the catchment areas of their preferred schools.PropertyFox’s school feeder zone guide is a good source of info for parents on schools and property catchment areas.
Another noticeable trend is around sellers emigrating. According to the FNB House Price Index, over 7.5% of property owners with their homes on the market are packing up and leaving SA borders - a trend which will continue well into 2019 on the back of a weakening sentiment in South Africa, usually related to economic and political woes within the country.
The rise and rise of prop-tech
Majority of buyers already start searching for their new home online, and we are anticipating that number to continue growing throughout 2019. As the value of time increases, with society trying to squeeze every last second out of every day, and money increasingly tight in most households, technology that allows sellers and buyers to save time and save money will increase in importance like never before. We anticipate more and more consumers will turn to nimble online real estate agencies for the efficiency of the process and the attractive fees.