The economic impact of this pandemic has been felt across the globe as countries retreated into lockdown and partially closed their economies to contain the spread of COVID-19. As most of the world slowly emerges from lockdown and cautiously begins their new normal, the need to buy, sell and rent has reemerged and reignited property markets across the globe.
According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, the South African property market is set to make a slow but steady long-term recovery. “According to our website traffic, we have seen a substantial increase in listing viewings in April and in May. Despite the increase in traffic, there has been a drop off in leads on our site (form fills, call me back requests, etc.) in March and April. However, in May, the number of leads generated from our website already returned to similar amounts as we saw in February before the lockdown began. This leads me to believe that the spike in listing views will soon turn into more leads and enquiries that result in more sales in the months to come,” says Goslett.
Goslett’s predictions align with trends that are emerging in property markets across the globe. Australia and America, for example, have already seen increased activity within their markets and the representatives of the RE/MAX offices in these countries have painted a hopeful picture for recovery.
Low Stock and Steady Demand in Australia
Property isn’t immune to the financial stress the pandemic has caused, and RE/MAX Australia has seen slight drops in some areas. However, as Morris Short from their Parramatta office points out, there’s still buying demand in the Sydney real estate market. With fewer houses available, prices in the Harbour City are holding relatively steady. The same may well be true for other capital cities.
In Perth, homes are reported to be flying off the shelf. “There’s more attention on each property with less homes on the market; down by 43%, with 5038 properties. Selling time is faster; 66 days, down from 85. Home opens are allowed again and activity and enquiry is high. Offers are coming in close to asking prices,” says Ken Williamson of RE/MAX Australia’s GBT Realty, Nollamara.
Dan Elliott of RE/MAX Australia’s Morningside office noted a similar lack of properties on the market in his area, even though there were still buyers with finance ready, still working, and serious about finding their next home or investment.
Yet, it seems that demand has not yet outweighed supply. “Once the health emergency is over the market will bounce back and rapidly. Furthermore, for prices to drop, there needs to be a supply and demand inequality. This is currently not the case – both buyer and seller numbers have dropped equally,” explains Daniel Burrett and Katie Knight, RE/MAX Success, Toowoomba.
Americans Motivated to Move Homes
Despite the market slowdown, Gary Ashton says May was the busiest month his Nashville brokerage has ever seen. According to the No. 1 RE/MAX Team Leader in the world, there remains a huge demand for real estate.
“We’re not seeing any decline, except maybe in price points above $550,000,” says Ashton, Team Leader of the Ashton Real Estate Group with RE/MAX Advantage in Tennessee. “You’ve got the double whammy of the low interest rates, so when people are realizing, ‘I want to have my own house with a yard and be able to have the kids outside,’ all those kind of things are playing into people’s motivations to move.”
According to the April 2020 RE/MAX National Housing Report, while home sales and inventory declined in the report’s 53 markets, home prices saw steady gains. In fact, the Median Sale Price of $276,000 was up 9.3% year-over-year. As many states begin adjusting to the new normal and easing some restrictions, current metrics suggest that housing is already showing positive signs of recovery and RE/MAX CEO Adam Contos believes underlying interest in buying and selling remains high.
What does this mean for the SA market?
The hope is that the South African property market will show similar signs of buyer interest over the coming months as we emerge from lockdown. “Though we are encouraged to see some early signs of increased activity in the market, it is still a long journey ahead before the housing market fully recovers. I remain cautiously optimistic about the future,” Goslett concludes.