Real estate markets across the globe have experienced high levels of activity following the outbreak of the pandemic. This season of high activity seems to be reaching its end, with many countries now reporting a levelling off in buyer activity.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the unprecedented levels of activity we have experienced locally are not unique to the Southern Africa region. “Fellow RE/MAX directors across the globe have also reported high levels of activity within their respective housing markets. This speaks into just how widespread the pandemic’s effect has been on changing people’s lifestyles and living requirements,” he states.
However, many are now beginning to see levels return to normal following a year of unprecedented growth. In the United States, the August RE/MAX LLC National Housing Report reveals that August home sales dropped 3.5% from July’s total – and the Median Sale Price slipped 1.2% to $335,000 – as seasonal norms signalled that 2021’s busiest homebuying and selling months are at an end. Despite these drops, August still almost broke records for home sales.
“The slight seasonal decline in home sales from July to August was countered by this being the second-highest August sales total in the 13-year history of our report. So, although we appear to be past the blistering summer peak, the market is still very active,” says Nick Bailey, President, RE/MAX, LLC.
Moving over to New Zealand, in the latest issue of RE/MAX New Zealand’s National Property Magazine, REINZ data revealed that the median house price was $850,000 and the median days to sell was 30 days. “House prices have once again risen across the country, with every region seeing a year-on-year increase from August 2020. This latest lockdown has not dampened demand for, or confidence in, the housing market as we saw in early 2020. We have heard from across the industry that prices achieved on sales completed in the early part of this lockdown continue to illustrate an ongoing excess of demand over supply; prices are still rising,” says Jen Baird, Chief Executive at REINZ.
The neighbouring Australian market has also experienced high levels of activity since last year but is now starting to notice a levelling off in demand. In a recent article, Joel Davoren, Managing Director for RE/MAX Australia wrote: “What I’m seeing in my own network is that there is a marginal easing of market frenzy (FOMO). Listings haven’t dropped off and the volume of buyer activity is levelling. REA figures for April supported this, showing buyer enquiry down. But while this may be the case, segments of the market remain red hot.”
Despite this levelling off in activity in his own market, Davoren believes that the future of real estate remains positive across the globe. “Rising prices are almost a worldwide phenomenon. Impacting markets are low-interest rates, employment, rebounding industries, especially tourism and hospitality, the rollout of the vaccine, and the eventual opening up of overseas immigration. All of these things are generally on track in Australia and the outlook for the economic market, including property, is encouraging,” Davoren added.
Bringing it back to our local market, Goslett echoes Davoren’s sentiments but still expects that the South African market is likely to experience a similar levelling off in buyer activity in due course. “I do not believe that the South African market will remain as active as it is forever. While I cannot predict with any certainty if and when market conditions will change, I do encourage buyers and sellers to take advantage of the current conditions while they last. Interest rates won’t remain this low forever and buyer demand will dwindle alongside any future interest rate hikes. Buyers and sellers should strike while the iron is hot before conditions change and are no longer in their favour,” Goslett concludes.
