2020 has turned out to be a year of many changes and unexpected events. After looking at the constantly changing property world, it’s safe to predict that there’ll be even more changes to come. So far, we’ve seen a global pandemic spread across the world and stop economic activity, a downgrade to junk status from Moody’s and large-scale job loss around the country. So, it’s understandably hard to remain optimistic regarding economic activity.
With everything that’s been happening, now is an ideal time to review the state of the South African Property Market. How will these external factors continue to shape the face of property investment in 2020? We’ve found a few reasons to stay positive – so here are our top 5 property investment trends for 2020!
As an eco-friendly or ‘green’ lifestyle has steadily been growing around the world, South Africans are starting to pay more attention to simple and resourceful living. This is one of the reasons we are seeing (and can continue to expect) more self-sustaining, environmentally friendly home solutions in the property market for 2020.
Some examples of self-sustaining living include moving over to solar-power in your home, making use of gas for cooking instead of electricity, installing rainwater-harvesting systems such as JoJo tanks and growing your own fruit, herbs and veggies in your garden.
Another reason for going ‘off-the-grid’ with more use of solar-power in your home is the increase in load shedding and power cuts as Eskom struggles to keep up with the country’s electricity demand.
Data visibility for the property market
We’re currently in an information age. This means that we can easily access information at the touch of our fingertips. More than ever before, companies are turning to computer scientists to develop data-driven models in order to improve their services. The benefits to this technology include increased speed, automation of many job tasks, customized search engines and so much more.
We predict that data integration will be important in order to enable more accurate property pricing within the industry. This will also include data-driven home evaluations for those wishing to sell, or even those who are entering or leaving a lease. Because the market is quite sensitive, it’s important to have a strong understanding of the value of your home from day one. If you don’t price your home correctly, it could sit on the market for months, as opposed to the standard 30-40 days. This data is also used to create a more seamless and enjoyable user experience for a potential customer.
Along with data being used for selling homes, there is also going to be a push towards visual data in the form of simulated tours. As online property purchase is gaining more momentum, it’s likely that virtual home tours will become more common. You will be able to see a digital simulation of your home and even request real-time changes to be made to your house.
PwC has reported that the middle class is set to grow by around 180% by the year 2040, with the major drivers being millennials and Generation Z.
The thing is, this demographic has a lot of existing student debt, so small spaces that are more affordable will be central to their property planning. This is made worse by the current economic climate.
At the same time, older generations will reach retirement and will start looking to downsize and save money, which will increase demand for starter houses, smaller spaces, affordable properties and well-designed storage. PwC also suggests that some homes may have smaller kitchens, as homes shift toward specialization – owing to the increasing popularity of dine-in and food delivery services all over the world.
Learn more here: To buy or to rent a property
Smart homes with digital technology
Devices are not limited to smartphones, tablets or laptops.
Technological devices are used for practicality, personalization and for capturing memorable moments, such as photos, calendars, conversations and more. Smart technology is starting to enter homes in the South African property market, and we predict that this trend will strengthen.
Smart TV’s have been around for a while, but this trend is set to inspire other items to follow suit. Appliances like fridges, freezers, microwaves and even ovens are now being designed with software that can allow you to personalize how you use them – including operating them solely through devices.
We’ve already been seeing new developments coming ‘fibre-ready’ from the start – this will continue to be standard for all new developments going forward.
Changing market climate
There’s more supply and choice for buyers than ever before, meaning sellers can sadly expect lower sales prices than anticipated. This is a trend that started in 2019 and is expected to continue, although there has been some growth in certain market segments.
At the same time, short-term rental investments involving partnerships between family and friends are growing. This is a valuable way to create an alternate stream of income. Examples of this include Airbnb and similar services, which allow for houses, flats or even individual rooms to be let out at competitive prices, depending on the season.
The property market is also seeing growth in the sectional title market. These refer to separate units in complexes or developments. Some of the benefits to this include communal living and shared maintenance costs.
It’s clear that there are a lot of changes to look out for during the rest of 2020 and beyond. Some of the new investment developments include a changing market for a property, a new purchasing demographic, smart homes with increased technological features, virtual property tours and data-based valuations, and eco-friendly and sustainable living solutions. Some of the features that new buyers will be looking for include smaller spaces and smarter storage solutions.
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