It is hard to predict things in an unpredictable climate. How often have we heard: “We could never have foreseen what happened in 2020”?
Economists and indeed some real estate heads are telling us that the trajectory at the moment is reminiscent of the market in 2008, although the difference is that 13 years ago we didn’t have the low-interest rates that have helped us remain buoyant.
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The low-interest rates have certainly seen more first-time home buyers enter the market after they do their figures and work out it is cheaper at the moment to buy than to rent.
However, TPN Credit Bureau reports that not all is rosy for tenants, and many can’t afford to buy. A recent TPN survey showed 75% of tenants reported loss of income during lockdown.
Giving them some reprieve, TPN has recorded a negative rental escalation of -0.75%. This is, however, a further blow to landlords, many of whom have been stuck with tenants who are not paying their rents and who refuse to move out since lockdown rules have made eviction difficult.
But whether you rent or own, the property market is a wave we are all having to surf. And there have been some wins: some estate agencies report higher sales last year – even with three months of shutdown – than in 2019, when the market was already on a downward slide.
I bumped into a real estate expert yesterday and his understanding is that things will remain pretty much the same as they are for the next eight months with sale prices probably dropping even further. But then, towards the end of the year, he predicts an upsurge in buying particularly at the higher end of the market which has suffered most from recent events.
Others worry about another black swan event that could absolutely turn everything around. An expert I chatted to yesterday said what we all deeply know: “Property is vital, everyone needs a roof over their heads.”
So no matter what unpredictable things may come, what laws may change, the fact remains whether you buy or rent, live in a commune or have a community of sorts, or whether you finally are able to access parts of real estate you’ve been kept out of – a home is one of the basic necessities.
Innovations in all forms – from laws to construction – will no doubt form part of our future. Buy, sell, rent, share, whatever, we hope you will have a safe and beautiful place to call home.