Some are optimistic. They feel the weakening of the rand may encourage foreign interest in South African properties which will in turn assist the recovery of the property development industry.
Added to that, once the lockdown has achieved its desired effect, Dave Williams-Jones, chief executive of FWJK believes the South African economy and the construction industry specifically – which is one of the large drivers of the economy – will return to normal in the short-term.
“Work will commence on construction projects around the country and we will quickly return to life as it used to be, albeit in a tougher economy. “I do expect greater foreign interest in buying South African properties due to the weakening of the rand which is a trend that we have observed in previous economic cycles and this, in itself, will help fuel the recovery in the property development industry.”
In the long-term though, he is uncertain as to how the industry will be affected by Covid-19 and the subsequent lockdown as the scale of the pandemic is unprecedented over the past 75 years.
“I am expecting and hoping that the current situation will soon seem like a bad dream and will fade in our memories…and that normality will soon return within the next three months.” As there has been no building progress over the lockdown however, delivery of developments may be delayed, says Brad Morgan of Rawson Developers.
The delay will depend on how long it takes for building sites to be operational again. Like all businesses, developers and construction companies have running costs that don’t stop just because the building sites stop and so the lockdown will also have “major cash flow impacts”.
“Understandably we have seen a slowdown in enquiries over this period. It is an uncertain time and people seem less likely to commit during such uncertain times,” he adds.
The length of the lockdown is unknown, and depending on how long it lasts, some businesses that do not have liquidity may not survive, leaving people in the industry unemployed.
“We are fortunate in that our company will survive this but it will be costly and it will take time to recover the financial losses.” Once the lockdown and virus threat has passed, Morgan agrees things will go back to normal “quite soon” from a business perspective.
The country and world though may take a lot longer to recover from the effects. “We are fortunate the property market, particularly in Cape Town, is a resilient investment and even during difficult economic times property has managed to retain value and growth.”
In terms of how properties are designed and developed, Williams-Jones says: “We are social creatures of habit and working from home definitely has certain advantages of convenience, but I for one, am already missing the physical presence of my work colleagues. Seeing them on a screen every day is just not the same as interacting with them in a dynamic office environment.”
He does not believe working from home is the way forward for the majority of people but notes that specific business types may migrate this way. Furthermore, the Covid-19 situation will not have a “major impact” on the way buildings are designed.
“I expect that the pandemic will be consigned to history as quickly as it began. Notwithstanding this, I believe we will never get over the fear of touching things like lift buttons with our fingers which will introduce design changes and foot-operated hand sanitisers will become the new norm.”
Morgan says the final outcome of the pandemic is “impossible to gauge”, but the property group will adapt its products to cater to any revised demands from clients.
“We remain positive that we will all get through this in the next few months and believe that property will remain the sound investment that it has always been and the demand for property will return to normal quite quickly.