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While the current situation in the South African residential property market is certainly "business unusual", it is also the best buyer's market in a decade, says Samuel Seeff, chair of the Seeff Property Group.
And it's good news for those in the market for properties under R3 million. According to Seeff, so far this year the market segment for properties up to the R3 million ceiling has largely been the most active.
"Sellers who had been holding out, have shown a sense of urgency. Generally, if you look at the sales figures, sellers have been willing to cut their asking prices to conclude sales," says Seeff.
He acknowledges that the coronavirus lockdown presents a considerable challenge, but says the use of technology means house-hunters can continue their search for a home online.
"While unprecedented, the country has experienced crises before, and the market will bounce back. In the meantime, there are no precedents for dealing with a crisis such as this and we will need to see how it unfolds to assess the impact on the market," argues Seeff.
Dr Andrew Golding, chief executive of the Pam Golding Property group, says recent international experience show that global economic shocks of this nature inevitably cause property transactions to taper off, as other priorities take over.
"As property has over the longer term proven a sound investment, it stands to reason that many will regard the residential property market as a safe haven amid the current heightened economic uncertainty," says Golding.
Berry Everitt, CEO of the Chas Everitt International property group, says the residential property market is quieter, but deals are definitely still being done.
"We have looked closely at what happened during and after previous global virus outbreaks such as SARS and H1N1, as well as various financial crises, to gain some insight into how the property market is likely to react in the wake of Covid-19, and concluded that stability is likely to return within three to six months," says Everitt.
"Trends we see developing are that some higher earners who have had their wealth diminished by falling equity prices are staying out of the market, while others are inclined to increase their property holdings now in recognition of the fact that, while growth in this sector is slower, it is still a lot less risky than the stock market. In addition, it affords investors many opportunities for tax relief."
Meanwhile, he says, the steep one percentage point cut in interest rates last week, and possibly another in May, is likely to prompt many first-time buyers and buy-to-let investors to go ahead with their purchases as soon as possible, especially since urgent sellers are likely to be more negotiable now and the banks remain keen to advance home-loans.
Momentum among first-time buyers will depend, however, on the avoidance of severe long-term damage to the economy and consumer confidence after the lockdown.
Michelle Cohen, principal of Leapfrog Johannesburg North East, says since the beginning of this year they have seen a huge number of sales activity and interest in the real estate market.
In both January and February in-office sales were up over 80% year-on-year. The sales were done primarily in the market between R750 000 and R4 million. Bonds were granted in over 87% of these sales and the sales have met all of the suspensive conditions. There is no reason to believe that after the lockdown period, if the result is successful and we are virus free, the property market will not continue as usual.
"I firmly believe that within weeks after this lockdown property will continue to sell. Property prices may dip a little to make up for the damage caused to the economy, but a willing seller and buyer, a good agent, and a correctly priced property will always be the recipe for a successful sale," says Cohen.
