The Agency Wrap, 2021
Category Market Reports
As we near the end of 2021, we look back on another whirlwind of a year, with lockdowns, new variants, political upheaval, and general uncertainty throughout the country, causing great stress for many.
But yet, we still find reasons to be positive, both when looking back at the year that was and the year that is still to come.
A strong showing for The Agency
While there is no doubt, as an agency, we have felt the uncertainty of 2021, we have enjoyed a strong year in terms of sales and rentals, with our trusted property advisors again enjoying a successful year. The Agency has also broadened its scope, moving into the Southern Suburbs of Cape Town and we look forward to further growth - both in terms of our team and the areas we work - in 2022.
As the world grapples with the pandemic, The Agency's model has again proven to be a strong one, with the continued push to remote work highlighting our outlook as best practice from the start. Our decision to embrace mobile work practices and flexibility for our advisors has always been a core pillar for The Agency and it's positive to see so many others following suit as the world takes on a new shape.
Cape Town, in particular, has shown great intent to embrace this new way of working, with the City of Cape Town and Wesgro (the agency responsible for promoting Cape Town and the Western Cape as a viable investment destination) both running campaigns to highlight the city's readiness to do so.
A trend to watch in 2022
Working remotely has also shaped some of the trends we have seen taking shape in 2021, with many homeowners upgrading their spaces to cater to the new lifestyle of work from home.
With homeowners spending more time at home, they have looked to clean up their spaces and carried out a few much-needed upgrades. With the onset of lockdown, and the long-term shift to a remote work lifestyle, homeowners have started to consider how best to maximise their space, to ensure not only a comfortable workspace, but lifestyle as well.
There is no doubt, that this will continue to be a trend in the future.
Atlantic Seaboard showing a resurgence in freeholds
The Agency's Managing Director, Kyle Leigh, notes that there are promising signs on the Atlantic Seaboard, particularly in terms of the freehold sector, with rentals also seeing a resurgence.
"There has been an increase in sales of around 10% in the freehold sector this year, which is to be expected due to the Covid-19 pandemic," says Leigh. "People are looking for more space, are working from home, and are thus spending more time at home. The prices have also increased, driven by the same reasons."
Atlantic Seaboard specialist and The Agency's co-founder, Simony Santos, further notes that this year has not been as positive for sectional title units.
"In terms of sectional titles, sales are down by about 4% from last year, with prices also down by 4.5-5%. Again, this is to be expected with more buyers looking at freehold properties.
Santos adds that the rental market has seen a positive upswing, driven by a demand from the semigration trend, which shows no signs of abating.
"What we have also seen in Q4 of 2021, is a significant recovery in rentals on the Atlantic Seaboard, with a growing demand for bigger apartments. Units with 2-3 beds are in high demand and we are expecting that trend to continue into Q1 next year.
"This looks to be driven by the semigration trend, with new arrivals often starting with a rental before buying locally."
Southern Suburbs follows suit
Areas like the Southern Suburbs, meanwhile, have also seen a positive uptick in sales as buyers look to settle away from the city.
The Agency noted earlier this year that there have been some noticeable trends starting to take shape in the Southern Suburbs, with a changing demographic of buyer and diversification of assets driving the prices.
There has been an increase in buyers in the 30-45 age demographic, with buyers looking to bring their children up in more natural environments, while a growing trend of sub-divisions and sectional titles means the prices have come down, allowing younger first-time buyers into the market.
"In the Southern Suburbs, and this is specific to the areas we are working, sales are similar year-on-year with prices up by 10% on freehold units," says Leigh. "Again, this is driven by the same demands as on the Atlantic Seaboard, with buyers wanting more space, and the suburbs cater to these needs.
"It is also the first time since 2017 that the median selling price of the freehold properties in these areas has shown such a remarkable upswing (nearly matching 2017's median selling price), which is a significant recovery for the market."
Like the Atlantic Seaboard, however, the same cannot be said for sectional title units, with sales again declining year-on-year.
Looking ahead to 2022 with optimism
Much like 2020, this year has been a tough one, but like last year we look ahead with cautious optimism. There are signs of stability, while the real estate industry continues to exhibit sustainability and an ability to rebound.
Author: The Agency Property Group
