6 Predicted property trends for 2021
The outlook for the property market this year stands in stark contrast to what could have been expected at the start of 2021. The reason for this is clear: we have had to endure one of the most economically difficult years in decades. Here are some of the trends that could be seen in 2021:
Value-added service
Customer service will have a big impact in the property market. In fact, because of the high level of investment required in a property purchase, it is necessary for real estate practitioners to do business in a way that shifts from being merely transactional to being relationship-based. The competitive edge that businesses in this industry have will depend on how well they treat their clients.
Dependence on technology
With advances in technology and the need to stand out from competitors, there will also be a greater focus on streamlining transactions - which could also mean great integration between real estate purchases and conveyancing. Real estate practitioners will do well to look for ways to add to their current service offerings.
Advances in technology will also mean that it will become more difficult for smaller real estate agencies to compete with larger ones. Making sure that there are quality systems in place to meet the demands of the industry will become vital to ongoing success.
The rental market
The rental market faces a tough time in the upcoming year. Because of the weakened economy, as a result of the COVID-19 pandemic, many landlords are struggling to find tenants to occupy their vacant properties or have trouble with payments that are in arears. Rental collections will be under pressure for the first few months of the year, and vacancies will remain high throughout 2021.
Moreover, the holiday rental industry does not seem like it will recover any time soon. The reason for this is that international tourism has declined dramatically, while the average South African is also finding it difficult to free up funds to go on holiday in a struggling economy.
Commercial property
The commercial property sector has also been under increasing pressure - not only because of the weakened economy, but also because retail space is coming under the threat of online shopping. Office space necessity is also coming under threat because of a greater move towards work-from-home opportunities. There will be a trend towards smaller office spaces and a smaller percentage of in-office workers.
Property investments and residential property
Property investment is set to grow in 2021. Because of low interest rates, now is a good time to invest in property. The key to taking advantage of new investment property is thorough research. Investors should look for areas with high quality tenants and low vacancy rates.
High demand for investment property will continue through the first half of the year, but quality stock will become harder to come by as the year progresses. The second half of the year will probably show a turn from a buyer's market to a seller's market. This is not only true of the investment property market, but for the residential property market overall. Properties below R1 500 000 are being bought up quickly and steadily, which may lead to stock shortages, which in turn will lead to a seller's market as property owners will start to ask more for their properties as it enters the market.
Moves toward outlying areas
Another trend that has been seen and will continue is that of movement to outlying areas outside of cities. This is especially prevalent because of the increase in work-from-home opportunities. Places that were previously considered to be holiday destinations or that were too far from the urban centres are now becoming more popular for permanent residence.
At 3%.Com Properties we are here to help you navigate the property market and advise you on the best property moves you can make in the year.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Value-added service
Customer service will have a big impact in the property market. In fact, because of the high level of investment required in a property purchase, it is necessary for real estate practitioners to do business in a way that shifts from being merely transactional to being relationship-based. The competitive edge that businesses in this industry have will depend on how well they treat their clients.
Dependence on technology
With advances in technology and the need to stand out from competitors, there will also be a greater focus on streamlining transactions - which could also mean great integration between real estate purchases and conveyancing. Real estate practitioners will do well to look for ways to add to their current service offerings.
Advances in technology will also mean that it will become more difficult for smaller real estate agencies to compete with larger ones. Making sure that there are quality systems in place to meet the demands of the industry will become vital to ongoing success.
The rental market
The rental market faces a tough time in the upcoming year. Because of the weakened economy, as a result of the COVID-19 pandemic, many landlords are struggling to find tenants to occupy their vacant properties or have trouble with payments that are in arears. Rental collections will be under pressure for the first few months of the year, and vacancies will remain high throughout 2021.
Moreover, the holiday rental industry does not seem like it will recover any time soon. The reason for this is that international tourism has declined dramatically, while the average South African is also finding it difficult to free up funds to go on holiday in a struggling economy.
Commercial property
The commercial property sector has also been under increasing pressure - not only because of the weakened economy, but also because retail space is coming under the threat of online shopping. Office space necessity is also coming under threat because of a greater move towards work-from-home opportunities. There will be a trend towards smaller office spaces and a smaller percentage of in-office workers.
Property investments and residential property
Property investment is set to grow in 2021. Because of low interest rates, now is a good time to invest in property. The key to taking advantage of new investment property is thorough research. Investors should look for areas with high quality tenants and low vacancy rates.
High demand for investment property will continue through the first half of the year, but quality stock will become harder to come by as the year progresses. The second half of the year will probably show a turn from a buyer's market to a seller's market. This is not only true of the investment property market, but for the residential property market overall. Properties below R1 500 000 are being bought up quickly and steadily, which may lead to stock shortages, which in turn will lead to a seller's market as property owners will start to ask more for their properties as it enters the market.
Moves toward outlying areas
Another trend that has been seen and will continue is that of movement to outlying areas outside of cities. This is especially prevalent because of the increase in work-from-home opportunities. Places that were previously considered to be holiday destinations or that were too far from the urban centres are now becoming more popular for permanent residence.
At 3%.Com Properties we are here to help you navigate the property market and advise you on the best property moves you can make in the year.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
15 Mar 2021
Author 3%.Com Properties