Wondering what the market has up its sleeve for you in 2024? We've looked into the crystal ball and rounded up trends that will likely make an impact in the year ahead. Whether you're eyeing up that dream home, thinking of selling, scouting for the perfect rental, or considering becoming a landlord, 2024 has some great potential for your real estate goals.
If interest rates cool, the market will heat up
In November 2023, the South African Reserve Bank (SARB) kept the repo rate unchanged and ended the rate hike cycle. Prospective buyers and bonded homeowners will enjoy another sigh of relief: experts predict SARB will lower it throughout 2024. A drop in the repo rate leads to lower mortgage rates which makes applying for home loan financing more accessible and also makes repayments less challenging. The potential rate cuts will give hopeful buyers more confidence in taking the leap and drive up market activity.
Signs are still positive for rental growth
PayProp reports that South Africa has achieved eight successive quarters - two whole years - of positive rental growth after the rental market slump and a spike in arrears
caused by the pandemic. If inflation remains a risk in 2024, it may prevent great rate cuts. Potential buyers may choose to stick with rentals, especially as record levels of apartment construction come onto the market. Soaring electricity prices, petrol prices, and municipal rates may also ensure renting remains an attractive choice for cost-conscious home-seekers as well as a strong preference for 'Generation Rent'.
The quest for affordable homes continues
In 2023, properties in the lower price bracket were sought after and this is likely to continue in 2024. As more people migrate to urban areas, Nedbank has highlighted the increased demand for quality affordable housing. There's also a downscaling trend that may make a mark next year. As high-income households feel the pinch of consumer costs and a tightening of lending standards amid higher borrowing costs, they may opt for budget-friendly alternatives. It's likely sectional titles will be the stand-out choice for their safe, low-maintenance lifestyle.
Semigration still has legs but with a twist
In 2023, FNB's latest estate agent survey showed that semigration was cited as the reason for selling a house in more than 10% of sales in the second quarter of the year. Semigrants have moved for a variety of reasons, including better municipal services safety, and more appealing lifestyles. This is likely to trend in 2024 but the choice of location is shifting. According to Lightstone, smaller towns have become the preference and have reported a relative increase in sales activity in 170 towns across the country. In terms of provinces, the Western Cape is the country's semigration hotspot, which will likely remain unchanged in 2024.
Hybrid working will eclipse remote working
In 2023, Zoom, the poster child of pandemic-fueled remote working, called its employees back to the office. And as constant load shedding impacts local workers, remote working may not be as popular as it was. Instead, hybrid working will likely be a popular compromise, offering the flexibility that workers need and the collaboration and productivity that companies need. Building on that, 2024 may see a move towards well-equipped hybrid-friendly offices, which will include spaces for collaboration and wellness.
Sustainability grows beyond a buzzword
While 92% of the citizens in South Africa say that the topic of sustainability is important to them, only 58% are living sustainably. This is slowly changing as the real estate industry embraces green practices. Property developers are including more energy-efficient solutions in their building designs such as solar installations, water-efficient taps and showers, and sustainable flooring. As these hit the market, home-seekers will be sure to see more eco-friendly choices reflected when viewing listings.
The pulse of politics will have an impact
Whether big or small, the 2024 South African general election is sure to affect the country's economy as well as the real estate market. On the negative side, there are potential disruptions, investor uncertainty and caution leading up to the election (both domestic and foreign), and potential real estate policy changes as new leaders take the reins. On the flip side, it could have a positive impact on buyer sentiment and spark investment, depending on the parties that come to power or make up a ruling coalition.
Step into 2024 without fear
While next year may be filled with twists and turns, a worldwide leader in real estate has the expertise to help you navigate the real estate market. Trust in Century 21 South Africa to ensure you find success - whatever the trends currently shaping the industry. Boasting branches across South Africa, there's a SMARTER. BOLDER. FASTER.™ property professional ready to help you buy, sell, rent, or let out your property.