Search Property For Sale

Covid leaves a long shadow on economy

Google+ Pinterest LinkedIn Tumblr +
South Africa’s economy looks set to recede “well into 2025” and this will impact on the country’s property market in particular ways, says Merle O’Brien, principal futurist and head of foresight and innovation at at Cape Town-based Creation iLab – the African Innovation Institute for the Future.

Property stock will increase in waves over the next six months to six years as cash-tight property owners sell and, in the short-term – six months to a year, more tenants will cohabit instead of renewing their leases.

These occurrences are all the result of Covid-19.

She says long-term drivers of change include economic contraction and this will result in:
♦ People moving and emigrating more.
♦ Baby boomers downsizing.
♦ Millennials battling to buy homes.
♦ Gen Z showing greater propensity for risk.
♦ Rising female empowerment and “huge loss” of consumer confidence among men.

“Overall consumer spending is slowing over the long term but consumer birth rates in Africa will continue rising.”

Employment rates will continue to decline, leading to bond delinquencies of luxury homes and “reducing generational value”.

“More entrepreneurs will work in home-based, micro-retail online business,” says O’Brien.

Future housing options will be heavily impacted by:
♦ Government policies such as land expropriation without compensation, property taxes, incentives and stimulus relief grants.
♦ Investors who will use the opportunity to buy low and sell high – or sit out the next five years.
♦ Interest rates, the stock and currency markets that are subject to more shocks.
♦ Consumer confidence in taking on bond debt.

“Covid has intensified the rate of economic contraction,” O’Brien says.

Share.

About Author