Private Property reflects on what happened during 2019 in the South African property market, and how that’ll lead to 2020 property trends.
The 2019 property landscape
Before we begin analysing what to expect in 2020 property trends, it’s prudent to reflect upon the South African property market as it stands at the end of 2019. 2020 property trends will build on everything we’ve seen during this year, and while there won’t be many surprised faces around our table, there are some interesting things to expect in the new year, and the coming decade.
How 2019 influences 2020 property trends
As an election year, 2019 had its own strange struggles just from that single event. Traditionally, election years are known for being quieter than usual on the property and investment front, as investors prefer to hold off on making any big decisions until a certain level of political certainty returns. Once the votes had been counted, activity, as predicted, picked up a little. But, with the advent of further load shedding, and uncertainty around property rights in South Africa, there are a few things we should expect more of in 2020.
Global perceptions of South Africa
We’ve thrown the term “junk status” around a few times this year, and somewhat fearfully ogled the news headlines each time. But, where there is concern, there is always opportunity. While ratings agencies’ perceptions of South Africa in terms of investment opportunities may seem worrisome, we must keep in mind that foreign investment into South Africa is changing in many ways.
Foreign property purchases
In previous decades, private foreign investment often came into the country via our property market, and while that may be declining in some areas, we are still a good bet for property seekers. In 2016, we hit an all-time high with foreign buyers purchasing one in twenty homes available for purchase across the South African property market. How that plays out in 2020 remains to be seen, and we’re sure that property seekers from other countries are also keeping a close eye on the proposed change to our Constitution. Looking ahead at 2020 property trends, we’ll soon know what to expect in this legislative realm for the South African property market.
Affordable housing market
We noticed an interesting development in the South African property market in 2019: the affordable housing market is...booming. And, if 2019 is anything to go by, then this is set to continue as one of our surefire 2020 property trends. There are two elements to this 2020 property trend: Firstly, government support for first-time homeowners is great. For example, the FLISP subsidy provides lower and medium income earners with a substantial subsidy, that can be used to purchase property. Similarly, properties purchased for under R900 000, attract no transfer duties. And, as the need for affordable housing options grows, we firmly believe that this section of the South African property market will continue to bloom in the coming decade.
The millennial market
Our millennial generation is...growing up. That said, the millennial generation does seem somewhat committed to being “Generation Rent”, which is good news for property owners. Rental properties remain in high demand across South Africa and we believe that this will simply continue to grow as we move into the next decade. The millennial market aside, however, as more and more people confront uncertain economic times, or consider new ways to cut back on their living expenses, our South African rental market will only continue to grow.
Mixed use developments for millennials
But, that said, the millennial generation is indeed growing up, and we predict that the desire and need to “settle down” is coming in thick and fast. The millennial market introduces an interesting development for 2020 property trends. The demand for mixed use developments remains on the rise, as these directly respond to a typically millennial need for blending work, play, and lifestyle needs. Urban living opportunities, matched with significant attention paid to urban regeneration projects across South Africa may usher in renewed demand for interesting, purposeful living spaces.
High tech homes
Sure, teleportation is not how we’re travelling to and from work every day, and I’ve yet to be suited up for my hoverboard, but the demand for high tech homes continues to grow. Where solar powered geysers were once uncommon, they’re now considered an almost standard feature for suburban homes. Similarly, fibre connectivity, with Internet Of Things-enabled infrastructure has become somewhat expected in the higher echelons of the property market. Thinking back to the last turn of a decade, I had yet to own a smartphone (by choice, mind you!)...and now, as we usher in 2020, smartphone penetration across South Africa is now well over 80% of the mobile phone market. The demand for an always-on, connected lifestyle is reflected in 2020 property trends, so yes, your fridge will soon tell you that you need to buy milk long before you know about it. And yes, we are looking forward to a 60-minute, app-driven grocery delivery service, as currently being trialed by a particular retailer in certain areas of South Africa. High tech homes aren’t only, however, another one of our 2020 property trends - they’re a surety of our times, as we move towards another decade of innovation.
Sustainability as a lifestyle
We wouldn’t even consider this another one of our 2020 property trends; it’s simply an essential move for everyone on the planet. Whether compelled by purpose, cause, or circumstance, the need to create and follow through on more sustainable living choices is now part and parcel of modern living. From small, personal acts of curbing combat change from your own garden, to dealing with larger concerns around national natural resource management, the agenda is very clear: the more everyone does to preserve what our planet has to offer, the better off everyone will be by the end of the next decade. 2020 property trends reflect this already, as the demand for eco-friendly, green living properties continues to grow.
Our recommendations for the next decade
Of course, with the cost of living escalating, and our personal concerns around economic conditions never far from our minds, we must remember that a new decade presents new opportunities. Perhaps downsizing seems like a suitable option for your family and, if so, you’re bang on trend. In whichever way you approach this new decade, and in light of 2020 property trends, remember this: your home is what you make it, so enjoy it! Settle in and enjoy the home you have now, while you plan for a future in the home you just might be living in at the end of the next decade.