Will the Warmer Weather Ignite the Market?
There are a couple of factors to take into consideration.
There is no doubt rising costs are influencing market appetite and paired with an increase in interest rates, consumers are making choices that alleviate immediate and predicted pressure. What's important to remember is that recovery is imminent and short-term decisions should not influence long term gains. Interest rates are still lower than a few years ago and therein lies an abundance of opportunity.
We believe the purchasing of second investment properties, which has taken a bit of a downturn during the pandemic, will start to gain momentum. First time buyers with the desire for risk will scout the landscapes for prospects.
The knock on of this is that investors usually gravitate towards coastal regions, making places like the West Coast and Garden Route highly desirable, as these are the usual summer holiday suspects.
So, if investment and holiday homes are expected to gain traction, what does that mean for the residential market in Summer? It is difficult to say, as in recent years some of the traditional trends have been thrown out the proverbial window.
My feeling is that most people don't make rash decisions prior the end of the year, and that is usually what we see. The suburban market picks up quite heavily in the late summer months and relocation, fresh beginnings, new jobs, school changes etc. are usually the source thereof. It is possible this trend will continue, but I think we might see a very active post-winter market.
The next couple of months are going to be interesting and we will definitely be keeping our finger on the pulse of the market.
29 Aug 2022
Author Harcourts South Africa
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