Rising Costs to Impact Property Market
The announcement yesterday that fuel, diesel and gas will be hiked again is very worrisome. The economic effect of the increased fuel price negatively impacts multiple industries and consumers pull the short end of the stick.
This, combined with heavy loadshedding schedules, will undoubtedly translate into decreased consumer confidence and holistic community frustration. It puts the general population under extreme pressure. This will certainly impact the property market.
How will it affect the property market? Well, firstly, as many of us return to the office and society begins to normalize, rental properties close to CBDs will increase in demand. Consumers will have to spend less on fuel and that means moving closer to work and school.
Another change usually seen in these circumstances are amplified queries for properties in the affordable market, both in the rental and home buying segments. Many see this as a perpetual problem and continuous economic fluctuations will counteract the low interest rate in some areas of the market.
Consumers are going to tighten their belts and try and save where they can. Especially if they can reduce costs on transport and other expenses in lieu of a property that is a bit more expensive but ideally located.
We hope that the Reserve Bank weighs up this increased pressure on the public when making its next interest rate decision and opts to not increase rates, or at most, limits the increase.
Agents, buyers and sellers are going to have to be aware of these knock-on effects when pricing and bidding for properties in high demand regions.
We remain positive that government and private sector can work together to mitigate against further consumer price pressures and that trust in the market remains stable.
Statement by
Richard Gray
Harcourts SA CEO
06 Jul 2022
Author Richard Gray - CEO of Harcourts South Africa
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