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It’s hard to predict what property prices will do in 2022, given the uncertainty we’ve seen over the last year thanks to the pandemic. But we’ve asked several experts to gaze into their crystal balls and give us the lowdown on what we can expect the market to look like next year.
More of the same?
FNB’s House Price Index shows an annual house price increase of a respectable 4.5% in March this year. It’s almost double the 2.5% seen in March 2020 at the start of lockdown restrictions.
Carl Coetzee, CEO of BetterBond, says: ‘The unexpected recovery of the property market we saw last year, as lockdown restrictions were lifted in June, will likely continue throughout this year and potentially well into 2022 as well.’
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There are several reasons for this recovery. Thanks to prudent management by the South African Reserve Bank (SARB), there’s been no major panic, so rates have stayed competitively low and borrowing at affordable levels.
Coetzee says: ‘The five consecutive repo rate cuts last year have dropped the interest rate to its lowest in more than 50 years, creating the ideal lending environment. As a result, we see that the property market has not only recovered; it is booming.’
The boom will also be fuelled by home buyer appetite. ‘BetterBond saw a massive year-on-year increase in bond applications in December 2020 – traditionally a quiet period for buyer activity – with application volumes increasing by 53%.
‘This is significant considering that it also occurred during a pandemic. This uptick has continued into 2021 and bond applications have increased by 40% year-on-year for March. The sustained interest in bond applications from first-time home buyers is also a good sign that the property market is on an upward trajectory,’ says Coetzee.
Not all market commentators are upbeat about next year. ‘In nominal terms, house prices are expected to stay flat, with a corresponding dip in real terms,’ says Marcél du Toit, CEO of real estate agency Leadhome.
Estates to outperform sectional titles
Du Toit believes that estates will outperform sectional titles and freehold properties. He explains: ‘The main reason is that estate living generally offers an all-inclusive living experience with schools, shops and a secure environment for children. With the move to working from home during lockdown becoming entrenched in the SA working society, we expect more buyers will gravitate towards a living experience where live-work-play is facilitated.’
The location of the luxury estate will be an important factor too. ‘We are also of the opinion that the prices of properties in smaller towns, outside of the metropolitan areas but within an hour’s drive of the metro centre, will increase at rates higher than average,’ adds Phil Barker, of Renishaw Property Developments on the KZN South Coast.
Will the buyers’ market continue?
It’s still a buyer’s market as the South African residential market remains oversupplied with stock, but Du Toit warns that this will not last.
‘We believe 2022 will be the last year of relatively buyer-friendly conditions, after which we expect house prices to return to growth as the world and SA economy recovers. So yes – there will still be good deals around, but time will be running out!’
So, if you’re a seller and are not under pressure to make a quick sale, holding onto your home until the buyers can no longer dictate the terms may be a good idea.
Boosting your home’s value
If you want to give your property that extra boost in value, it’s vital to maintain it with ongoing repairs and maintenance. While this may be an expensive undertaking, remember that unloved homes are very hard to sell!
If you have no option but to sell in the next year, you will need to make your home stand out from the crowd. Du Toit says: ‘Upgrades, refurbishment and makeovers may be a valuable investment choice, or an absolute necessity for you to compete with other properties on the market.
‘Carefully considered improvements to increase your property’s value will win the hearts and hard-earned buying power of your future home owner.’
Of course, make sure you’re not bound by any rules before you start knocking walls down. ‘Most estates are supportive of upgrades and improvements to homes that will improve the overall value of homes in and attractiveness of the estate. That being said, we highly recommend that you engage with the estate manager to ensure that you fully comply with the rules and regulations of your estate,’ says Du Toit.
