The original headline of this podcast was inaccurately titled ‘Residential property market expected to plummet this year’. We apologise for this oversight.
NOMPU SIZIBA: It’s our property feature, and today we take a look at the expectations for the residential market in 2021. Improvements were seen in some parts of the market last year, particularly the sub-R1 million level of the market, as buyers took advantage of the relatively lower house prices and low interest-rate environment. But, as the virus continues to wreak havoc and the national lockdown tightens, what are the prospects going forward? Well, to give us his take on things I’m joined on the line by Berry Everitt, CEO at Chaz Everitt International Property Group.
Thank you so much for joining us, Berry. Now, before we focus on 2021, just give us a quick synopsis of what happened in 2020.
BERRY EVERITT: Well, 2020 was an incredible year for all the wrong reasons. But we ended very, very strong in the last six months of the year. It was almost as if it was just a blip on the radar in terms of the results that our company produced. In fact, the move with the technology and the digitisation of our business to move onto our platform allowed us to communicate well with the customers. And it really changed the way we could deal with our customers. When there’s a lockdown like you had on March 27, what do you do? What you can do is reach out and try to assist each other, because it becomes something really scary for many of the clients that we had and for many of our agents. So it’s just about being human.
NOMPU SIZIBA: Fast forward to now, to 2021. It has kicked off with a terrible bang – increased infections and deaths, tighter lockdown regulations and a continued feeling of uncertainty for the economy and jobs. In this context, how do you see the various components of the residential market playing out?
BERRY EVERITT: I don’t have a crystal ball, but we do think that the momentum from the lockdown last year will start losing some of its steam and, although inflation remains low and interest rates are expected to remain low right through to 2022, still there are so many job losses and such an effect from what you’ve just mentioned. And when the perception in the market is one-half uncertainty, no markets do well. So that’s where we are right now.
NOMPU SIZIBA: Just speaking to what you’re saying there, what does this then mean for the approach of the banks? Can we expect them to become more risk-averse as well because, like you say, there’s so much happening? Not much has improved from last year.
Well, let’s firstly say it’s not all doom and gloom from a property-market perspective.
Every one of the first-time home buyers that we had last year – about 64% of our buyers last year who actually bought a registered property after the lockdown were all people who were previously renting properties. So they found this a great opportunity to come and buy, and we saw the age of first-time home buyers being relatively old compared to what we’d seen a decade before. And, you know, the low interest rates, the lowest in 50 years, are creating that market that you’ve just spoken about now.
In the upper [level], what we have seen that is strange in a market that’s normally robust – the middle, middle to upper middle, and even going into the upper market – is a lot of those people feeling substantial stress. And that’s unusual.
NOMPU SIZIBA: It’s a very tricky time, indeed. And, just in terms of the interest-rate environment, do you think that’s likely to remain low? And that, of course, if people can afford to buy property, even though you do see momentum coming down, should they go for it?
BERRY EVERITT: Absolutely. Because for the buyers this is a market that’s moved where sellers have fast [reached] the need to sell, and that’s an opportunity for the buyers. So they shouldn’t be sitting on the fence. And for sellers that need to sell, they shouldn’t be sitting on the fence, either way, for the market to improve, because it might be a long while before it does with all the uncertainty. So, if you’re looking to buy upwards, this is a great opportunity to do so because the bigger properties are taking the bigger discounts.
NOMPU SIZIBA: Berry, thank you so much for your time. That was Berry Everett, CEO at the Chaz Everitt International Property Group.