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During a recent webinar hosted by Nedbank Private Wealth, a panel of experts explored the impact of Covid-19 on property in South Africa, and looked at emerging trends and opportunities


South Africa’s property market was arguably one of the sectors worst hit by Covid-19 and subsequent lockdowns. The gradual lifting of restrictions, coupled with the vaccine rollout, should equate to better economic fundamentals that may catalyse a property recovery. In the meantime, the various property sectors are affected differently by the impact of the pandemic.

Residential property

During the webinar, Andrew Golding, chief executive, Pam Golding Property Group, pointed out that the residential market has already been quite subdued before Covid-19, with volumes and prices trending down. “There was an expectation that, after lockdown, there would be some pent-up demand,” he said, ‘but it soon became clear that the market had actually benefitted somewhat from the restrictions. And to everyone’s surprise the market was quite buoyant with a lot of activity, which has effectively continued until now.

“Volumes have been up quite significantly and, while there was no real house price growth at the end of last year, we’re now starting to see that market move as sellers become a bit more resilient to opportunistic buyers who were certainly very prevalent immediately following the lockdown.” According to Golding, this upward trend has predominantly been fuelled by the lower end of the market, mostly fed by the low interest rate environment and because those who previously would have been renting now see an opportunity to own homes. This has pushed the entire market up in terms of sales volumes and values. “This trend will continue, even though interest rates will not stay low forever. As house price growth has been muted for a number of years in terms of pricing, it’s also a good time to buy.”

Structural trends accelerating

Semigration was already a trend before Covid-19, with people mainly moving from the north of the country to the coast, but it now happens in a much broader sense. “People can now work from almost anywhere and can make lifestyle choices not influenced by commute time to the office. Before Covid the trend was to live, work and play in close proximity, but that has changed significantly since the advent of Covid,” Golding said. Remote working and the emergence of so-called ‘Zoom towns’ have had a material effect on the property market, as people now have the ability to work and live basically where they choose. This has also impacted international buyers and second homebuyers.


“This has resulted in material changes to the perceived value of many towns, particularly on the coast, and there’s opportunity in these areas, especially for homes that offer the flexibility and space for working from home.” Another trend following Covid-19 is that people realised they want a space to accommodate the changing needs of their families, for instance that work spaces should not be in a room with other functions, like a bedroom or living room. Homeowners are also more green conscious, and changing their homes to accommodate that. This is another pre-Covid trend sped up by the pandemic.

“Security plays a more significant role since Covid, which security estates have benefitted from, along with the lifestyle they offer, because people now focus more on environments where they can both live and work,” he said. The digitisation of the real estate industry was already happening before the pandemic, but has since accelerated. This has many benefits, not only in terms of the transaction process; it also added value to clients, enabling them to tap into the knowledge of the property professional more efficiently, he said.

Rentals under pressure

Rentals in both the residential and commercial space are under severe pressure since Covid-19. Tenants negotiated prices downwards, and renters becoming buyers put even more stress on the rental market, Golding explained.

Commercial property

On the commercial and industrial front, the picture is also less rosy. Panel member Norman Raad, CEO, Broll Auctions, explained that these sectors had been struggling before Covid-19, with a decline of roughly 20% in values already in place across the board, primarily due to economic challenges. As a result, participants in these sectors were hit extremely hard and values have been driven down even more.

“Rentals have had to be renegotiated, with some reverting back to levels last seen many years before the pandemic, creating massive and widespread devaluation of commercial, industrial and retail property,” Raab explained.

He emphasised that the main opportunity in the commercial segment now lies in finding creative ways of rethinking and reengineering existing properties, particularly given that the shift towards working from home appears to be a permanent one. This means many office spaces are likely to become liabilities rather than assets, unless their owners can repurpose them effectively.


Banks to refocus lending

While new commercial mortgage bonds registered at the deeds office were down nearly two thirds from 2019, this doesn’t necessarily mean that bank appetite for property finance has declined, just that their appetite has changed, said Robin Lockhart-Ross, non-executive chairman, Fortress REIT.

“With the onset of Covid-19, banks were more inclined to look after existing customers than new customers and were commendable in their behaviour in terms of accommodating clients struggling to repay their bonds. The property industry and the banks came through Covid much better than we might have feared six months ago. So banks are now in a better position to help new lenders than expected,” he said.

“New lending is vital for the sustainability of any bank, so we’re likely to see property finance transactions picking up as demand improves,” he said, ‘but lending has definitely become more nuanced than in the past. All the banks will be quite happy to provide finance, but will pay more attention to the serviceability of the loan and the sustainability of the client’s cashflow.”

Blended approach

Other trends and opportunities highlighted included ongoing digitisation of the industry with something of a ‘hybrid’ property transaction environment emerging, effectively giving realtors, brokers and banks an opportunity to focus less on the minutiae of processes and instead add more value to clients through their market knowledge and experience. The lower interest rate environment is also a continuing trend, with panellists agreeing that low short-term rates shielded the property market during Covid-19, but are not enough to sustain the property market going forward – that will require robust long-term economic growth.


While property has a long road to recovery ahead of it, the webinar panellists agreed that there are still opportunities in the market. Historically, property has proven to be very resilient, and the infrastructure and innovation is in place to get the sector through its current challenges. A well-designed, well-located and well-managed property in the hands of a patient investor or smart owner, who has the balance sheet and cashflow to weather the current economic storm, will almost certainly remain a highly attractive investment over time.


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