The real estate industry has remained popular throughout the years, and even during the Covid-19 pandemic many people had been looking at ways to secure homes.
While buying houses gets a bit pricey sometimes, many people have also started to explore the idea of buying smaller places such as apartments or land to build.
There is also a rent-to-buy phenomenon where people rent the homes they want to buy for a certain amount as opposed to signing up for a loan.
How do you, as a real estate agent or specialist, keep up with different trends and buying behaviour from real estate customers and the industry at large? In this article, we will look at how to better navigate changes or developments in the real estate industry.
Let’s take a look at some of the trends and consumer behaviour according to studies by real estate experts and analysts and the forecast for 2020-2027.
Increasing demand for sectional title living in South Africa
The purchase of freehold homes by South Africans has been steadily declining, with buyers opting for sectional title and estate homes instead. Increased security, affordability and the communal lifestyle are attractive aspects when considering sectional title properties.
A sectional title unit is a property in an undivided share of common property. These units are known as townhouses, flats or apartments, and duet houses.
A slight decrease in the purchase of freehold property was seen yearly. Estate purchases remained consistent, along with the growth of sectional title property of up to 5%, studies showed.
Government-provided housing made up a major component of South Africa’s affordable housing stock in 2020. About 31% (2.2 million) houses were government-subsidised, up from 29% in 2009. Across the provinces, the Northern Cape had the highest proportion of government-subsidised dwellings (47%) compared to Gauteng, which had the lowest (27%).
Even though the market may seem a bit tricky to navigate, it is important to invest in the properties most people prefer while also offering the special ones that aren’t too popular. For example, have a large offering of flats and apartments, but keep free-standing and townhouses in certain popular areas at the back of your pocket for when customers are looking for something along those lines.
Certain real estate online short courses can help you make important decisions, such as investing in properties most people prefer while also offering the special ones that aren’t too popular.
Rental prices growth in South African provinces
There are high vacancies and low escalations across South Africa, fuelled by lower-than-normal demand in 2021. Historically, the rental demand increased during tough economic times, which is not the case in the present scenario. The data shows that few people are entering the rental market, and most of those rent for less than R 7 000/month. Most provinces saw low rental growth and a deterioration in the average tenant’s financial situation from the second quarter of 2020 to Q2 2021. Below-inflation income growth has made it increasingly difficult to keep up with debt and other costs.
The average rent in Western Cape surpassed the R9 185 mark during Q2 2021, making it the most expensive province to live in, with an average price differential of nearly R1 000 compared to the second-most expensive province.
In Gauteng, the average rent reached R8 292 in Q2 2021, 4.84% more than the 2020 rent and the third highest growth rate in the country for the quarter. While this rate was lower than the previous year, it was the province’s first increase in quarterly growth in two years, implying the beginning of a recovering rental market in the province.
When it comes to price brackets, ensure that you offer lower rental rates than when people are buying. Many South Africans are currently looking to rent more than buy due to leaving the country, working abroad, travel interests and more. So, if you can offer different pricing packages for different lifestyles, you are more likely to lead in the industry and defeat many of your competitors.
As a real estate specialist, it is important to keep up with the developments to decide where you will invest most of your resources. Invest in research and familiarise yourself with the different statistics that will offer you deeper clarity.
Because of the pandemic’s new normal, people have changed the way they purchase homes and valuable assets. Always ensure you give your potential customers access to seeing the estates they are interested in beforehand, book viewings and open houses that are safe and well-spaced out and have communication platforms where your target audience and customers will engage with you, allowing you to keep up with them and any issues they may have.
Go for the books
The real estate industry has many opportunities for you to study and upskill yourself. Invest in a real estate online short course and specialise in the different fields being offered. Despite uncertainty, real estate continues to attract investors as one of the most promising asset classes. Learn to make informed commercial property investment decisions with online short courses such as Property Development and Investment, Construction Management, Real Estate Economics and Finance, and much more.
Navigate the real estate industry with ease and equip yourself with the relevant information. Remember to join communities of like-minded people where you will be able to discuss any problems or challenges as well as new ways to navigate the industry.
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