Property trends to look out for in 2022
Category Property Advice
Interest rate leads 2022 trends conversation
The interest rate - and likely hikes throughout 2022 - is under the spotlight as the new year gets into gear, but many experts aren't worried, with the real estate market showing admirable resolve in the face of it all.
We look at this and other likely trends we're seeing take shape this year, from continued semigration to the Western Cape to off-the-grid living, it's going to be an interesting year indeed.
Interest in the interest rate
There will be a lot of eyes on South Africa's Reserve Bank this year, with most expecting a continued hike in the interest rate as it looks to unwind its accommodative monetary policy stance.
The experts believe that the prime lending rate will consistently increase this year as SARB is likely to hike interest rates thrice by a cumulative 75 basis points (bps) in 2022 and a further three times by another 75 basis points in 2023.
But will this affect the real estate industry? Will prospective buyers be spooked by the hikes? Thankfully, it doesn't necessarily spell doom for the industry, with real estate historically resilient in the face of even the greatest odds.
"We've just had our first hike for 2022 of 25 basis points and we're expecting it to continue every quarter at a hike of 25 bps from now until the second quarter of next year before pushing pause," says The Agency's Kyle Leigh.
"That news might scare some people, and it may well have a "cooling effect" on the market, but property is very resilient, and we're coming off an historic low in terms of the interest rate, so really it's returning to normal levels. It's obviously very difficult to say what buyers will do, but historically, real estate has pushed on despite previous hikes."
Semigration will continue towards the coast
Semigration has seen a steady rise over the past year and looks set to continue in 2022, with the coastal cities attractive to buyers, with remote work and hybrid models a big driver of the trend. The ability to work anywhere allows buyers to look further afield and consider the lifestyle elements that Cape Town offers outside of work and the city is well set up to accommodate the remote worker. It certainly helps that the provincial government is aggressively driving the region as a remote work destination.
Estate living still a strong lure for buyers
Estate living and areas in boomed-off suburbs are also continuing to show good growth. Safety and security is a key driver of this, with buyers putting a greater emphasis on these elements, but ease of access and lifestyle options is also a heady lure for buyers.
"The number one reason people are looking at estate living is for the security that they offer," agrees The Agency's Southern Suburbs area and estate specialist, Elle Hooper. "But for people who travel a lot, it is also a wonderful lock-and-go option."
Buy to let
The Oobarometer Q3 statistics indicate a rise in buy-to-let homebuyers, with buy-to-let investments increasing from 2% to 7% over this period. It's a trend that was starting to emerge late in 2022.
While rental prices took a knock last year - much of that related to the pandemic - there were positive signs in the rental market, particularly luxury rentals.
"The rental market has taken a big turn since December and January, particularly on the Atlantic Seaboard and in the Southern Suburbs, where the demand is much higher and prices are starting to reach pre-Covid levels," says The Agency's Simony Santos.
"We are also seeing people wanting bigger spaces, with remote working lending itself to office spaces at home, and there is certainly a nice demand for luxury rentals."
This is particularly the case in areas like the Atlantic Seaboard, which is still considered a very good bet for investors and is expected to grow stronger in 2022.
Eco-living and getting off the grid
Solar power, sustainable materials, and vegetable gardens - South Africans are looking to take their properties off the grid, not just because of local dynamics, but very much in line with global trends. Homeowners are looking to leave a smaller carbon footprint and by catering to a more self-sufficient home they are also raising the values of their properties.
Renovations on the increase
The pandemic has left a lot of marks and renovations have certainly seen an increase as homeowners look to ensure their homes offer them as much as possible. Functionality has become key, clutter has been jettisoned and all the flaws of the home have been highlighted as owners were forced to spend more time indoors. This isn't necessarily a bad thing, with less travel, a decline in events, meaning a shift in financial obligations, with many looking to home improvements this year.
It's all virtual
As the real estate industry - and the world at large - continued to live out online, the world of show houses also ground to a halt, and this will continue going forward, particular as buyers come from a digital native pool. The ability to innovate and embrace new technology will be a big part of what keeps agencies - and agents - ahead of the curve in the future. Personalising the experience, committing to viewing by appointment only and creating a curated journey for the customer will go a long way.
Author: The Agency Property Group
