Higher fuel prices, lower GDP and traffic will change home-buying in SA
The combination of the fuel price hike and the sharp decline in
SA’s economic growth rate during the first quarter is going to
increase urbanisation and intensify the demand for homes close
to work, shops and schools.
That’s the word from Rudi Botha, CEO of BetterBond, SA’s biggest
bond originator, who says that with agriculture and mining being
among the biggest contributors to the drop in GDP growth, there
may well be further employment cutbacks in these sectors that
will drive more people to leave rural areas and head to bigger
towns and cities in search of work.
“This is going to put pressure on the Department of Human
Settlements and its private sector partners to deliver more
affordable housing in urban areas and on municipalities to
fast-track their plans for inner city urban renewal and
infrastructure improvements.”
At the same time, he says, households are already feeling the
pinch of the VAT increase and other tax hikes implemented in
April and, given the predictions that this week’s sharp fuel
price rise will not be the last this year, many consumers who
already live in urban areas are now urgently looking to reduce
their transport costs by moving or buying a new home that is
closer to their workplace or enables them to reach it via reliable
public transport.
“Families with school-going children are increasingly also trying
to live closer to their preferred schools in central suburbs or
estates that are also well-supplied with other amenities, while
young professionals opt for inner city areas and integrated suburbs
where they can walk to the shops, restaurants, entertainment venues
and gym and often dispense with owning a car altogether. The rise of
ride-share services such as Uber have furthered this trend.”
Meanwhile, says Botha, worsening traffic congestion in SA’s large
metros is already encouraging more companies to allow their employees
to telework from home most of the time, with perhaps only one or two
visits to the office a month, and this trend is likely to be spurred
on now by rising transport costs.
“As a result, there is likely to be an increase in demand for
properties with home offices – and for those with space to accommodate
a home-based business, as an increasing number of South Africans also
set up their own enterprises in an effort to make ends meet.”
And finally, he says, internet-based businesses and companies with
online shopping options are likely to see sales to home-based consumers
rise significantly now. Also, he expects prospective buyers and tenants
to spend more time searching for homes online and narrowing down their
choice before venturing out to view a few in person.
SOURCE: Property24
