Is this a little 'bounce back'?
Category Blog
Is this a little 'bounce back'?
Shelter features high on Abraham Maslow's Hierarchy of the five categories of humanity's physiological needs. Put another way, having a roof over your head is one of the fundamentals of humanity.
Given that prevailing interest rates are at an all-time low, the now re-opened residential property market is showing early signs of a long-awaited bounce-back.
So much so, that there is apparently less 'wait-and-see' and more 'see and buy" on the homes front right now.
Furthermore, the emphasis is seemingly on buy-to-own-and-occupy, rather than buy-to-let, or to re-sell, at a hoped-for profit. Not least so because the gap between bond and rental payments has narrowed to equal.
Put another way, families and couples who are currently renting homes are becoming aware that ownership of those rented homes is achievable and affordability.
Price-friendly opportunities
This is a positive phenomenon in the homes market. And it bodes particularly well for first-time buyers with the means to take advantage of the price friendly opportunities now on offer in the current languid economic climate. First time buyers with steady jobs in businesses that have not been too negatively impacted by Covid-19 are viewed favourably by the banks, particularly at the lower end of the market.
Unfortunately, even though now is a good time to take the plunge to buy a home, disposable income on the whole remains at a low point for many aspirant homeowners.
Given the national economic setback that is rolling out, and gaining traction, in the wake of the CoronaVirus tidal wave, it is a situation that seems set to be prolonged.
Meanwhile, the recent, surprisingly good, performance of the Johannesburg Stock Exchange has been a boost for overall investment sentiment - in spite of the persistent presence of CoronaVirus fallout.
So much so that it absorbed some of the investment money that would normally have flowed into residential property!
Nevertheless, I believe that the prevailing trend of people buying homes - to occupy rather than to let - will continue at least until the CoronaVirus cloud shows signs of lifting.
Great opportunities
It will be only then that residential property prices will well and truly begin to rebound.
Until that happens, it will almost certainly remain a buyers' market offering great opportunities.
Barbara Corcoran, an American business woman and founder of a New York City real estate brokerage that she ended up selling for $66-million, was succinct in her description of a real estate market:
"A funny thing happens in real estate. When it comes back, it comes back like ghost busters"!
Author: Ronald Ennik
