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How's the Market? April 2020

“We know how to bring the economy back to life. What we do not know is how to bring people back to life. We will, therefore, protect people’s lives, then their livelihoods,” President of Ghana - Nana Akufo-Addo

Even though all transactions registered in the Deeds office came to a screeching halt on 27 March 2020 during the national lockdown, it does not mean that the Property Market came to a standstill.

Bonds are still being approved, new listings coming to market and actual sales are taking place.

As a professional I stay informed on the front line. It is still too soon to say how much the pandemic will affect the property market, however I will interpret the data available.

What is my home worth? This number is going to be influenced by several factors in the coming months. To estimate the current value would depend on actual sales, pending transactions and what your competition is in the market.

First let's look at the actual sales that did take place prior to lockdown in the "Valley":

Noordhoek Valley - Capri, Milkwood Park, Sunnydale, Sun Valley and Faerie Knowe.

There was a slight drop in the amount of sales in the Valley over the last 3 months, taking into account that we probably lost 4 business days, these stats are still accurate at the time. What was great to see is that the Median value of transfers remained unchanged.

What is my competition?

I suppose the Million Dollar (yes Dollar, cuz that value has gone up) is - what will the property market look like Post Covid-19?

Firstly, the drop in the value of the Rand does not spell doom & gloom for all. We had agents in our office conclude a R17million cash deal, and the only reason was that the home became more affordable in foreign currency.

Yes, we will be entering uncharted territory, but there is one thing that we do know for sure - this is NOT the financial crisis of 2007-2009. Our banking systems are not under pressure financially and there is currently not an over-inflation of property values. What we don't know is how the banks will react after lockdown, although their actions during lockdown has indicated that they still have an appetite for lending in a very competitive sector. With the expected drop in the amount of sales taking place, the banks may work harder to fight for the clients that are transacting.

With world-wide travel bans instated and the loss of the Rand's value, the massive exodus of South African residents may slow down, which primarily took place in the middle to high end property market. This may slow down the amount of new stock coming to market and help the market transition from a Buyers to a Sellers Market in a shorter time frame.

Irrespective of any of the above, the Economy and each market inside that, is about people. The psychology and sentiment of actual people on the street will determine how and when our property market and in turn our economy recovers Post Covid-19.

For any further information or to get your own assessment done, please do not hesitate to contact me.

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