Some less obvious consequences on the property market...

There has been a drop in home values in South Africa in the wake of the onslaught of Covid-19, but to quantify it is difficult to gauge. Countries where property markets have remained open, like Australia have already seen a 10% plus drop in property values.  

Clarity is scarce on how the residential property sector will behave once the current lockdown is lifted. Meanwhile, deals that were done during lockdown could well be cancelled if either party has a mind change, and finds a barn door through which to escape...relying on any illegal activity by any of the parties concluding the deal.  

An additional frustration, besides an inactive homes market - has been the closure of the Deeds Office. Once it opens, this week, it will more than likely run on a skeleton staff. And it certainly won't get through two months of backlog quickly. Also council clearance certificates will have expired, stopping transfers, and setting them back a few weeks. Councils should consider extending expiry dates on these certificates.  

Bond requalification 

The sting in the tail right now is that banks are exploring whether or not they should re-visit the bonds they have granted in order to pinpoint those that may need to be reassessed. It is a process that may well result in them re-qualifying bonds that are currently in the pipeline. Banks don't like lending to buyers under financial pressure.  

Occupation dates 

Furthermore, the occupational dates on existing contracts might need to be reviewed because of current restrictions on the movement of goods and people. This doesn't bode well for service providers in the home buy/sell process - not least the removal companies. 

Fresh start 

Right now it is quite clear that there will be fresh stock coming to the market as, and when, people have a need to access their capital in the current poor economic climate. Furthermore, new buyers will emerge as certain industries continue to benefit from the lockdown regimen. 

People in the now booming online entertainment or communication sectors, or others, will be able to buy because they are in a relatively strong situation. Other 'fresh' buyers and sellers, who are not happy with their current homes, after prolonged lockdown, will come into the market on the back of their frustration. 

Whichever way you look at it, Covid-19 has caused the biggest upheaval in the South African residential property market in memory. But this, too, will pass. The re-opening of the Deeds Office will be a critical stepping stone in that direction. Substantial transfer duty will be appreciated by our government, in serious debt.  

A very different group of buyers and sellers will emerge motivated to transact. Some to climb back from their losses and others to benefit from obvious gains to be made.