Not only will we combat the coronavirus, but we will come out stronger, he says. “It is important to look at the positives, and there are quite a few, for the property sector, despite all the negativity that clouds it.”
The major positive for the property industry is the 1% drop in the interest rate as it makes buying a home more affordable and more attainable. “The market remains a buyer’s market. Sellers are still looking to convert bricks and mortar into cash and buyers are still looking for the safety and security of owning a home.
“I believe in months to come we will see more relief for property owners and buyers as the government and the industry step forward to assist.” While agreeing that the interest rate drop is a welcome relief, Rawson’s Tony Clarke says buyers should be cautious about taking the cut as a signal to get a bigger home loan than they were previously planning to get.
“This cut and the further ones expected later this year will reduce rates close to historic lows, which means they can be expected to rise as soon as the economy improves.”
Other uncertainties that will follow the pandemic, says David Sedgewick of Horizon Capital, include job security and whether South Africa will see a protracted or short-lived recession resulting from the economic disruption.
“Sellers are going to need to be more patient as buyers hold back their purchasing decision to conserve cash and halt their outings, such as viewing show houses and meeting attorneys, agents and their bankers.”
Sedgewick says it is difficult to judge the longer-term impact Covid-19 will have on the global real estate market. “Some economists are currently forecasting a short and sharp global recession in 2020 with a global bounce-back potentially in mid-2021, given the high level of economic stimulus packages introduced by countries around the world.”
In South Africa, the interest rate has been slashed by its biggest margin in more than a decade but Sedgewick says it is not yet known what measures the National Treasury will propose to support the economy.
However, while times might become tougher, the 2008 global financial crisis and previous recessions have shown the world is “incredibly resilient” over the longer term and “we will come out of this and stronger than before”.
Greeff agrees: “South Africans are a resilient people and we have come together not only to fight this virus but to get together as one united front. “These unprecedented times can cause fear and panic, but I believe they will also provide a fantastic opportunity for innovation, and there will still be deals done as people look for normality.”