Downscaling? Upscaling? Zooming? South African Home Sales Trends
Category Market News
Selling your home is a long process and includes various moving parts. Each situation is different, and this important decision is one that every homeowner will need to make for themselves.
The reasons why people are selling right now appear to be on opposite ends of the spectrum as some look to downscale due to financial pressures, while those who are more financially secure are looking for their upgrade property.
The number of people requesting valuations on their homes due to their intentions to emigrate very obviously decreased during the hard lockdown between Q1 and Q2 in 2020
After a short spike between Q2 and Q3 when restrictions had eased, emigration sales continued to decline as the long-term financial impacts of Covid-19 really started to come through. This surge in the number of people selling their homes to downscale in the first two months of 2021 also supports this notion.
Simultaneously, the second quarter of 2020 saw a big increase in the number of people wanting to sell their properties to upscale, move into something bigger and more spacious, as the realities of working from home and home-schooling kicked in.
Zoom Towns
Small towns and villages have become known as 'Zoom Towns', an expression first used in America, but also trending across South Africa as the Covid pandemic drives people to look for a better-quality lifestyle. Small coastal towns within reach of a city and airport for commuting purposes are benefiting from this trend.
Where it has traditionally been older buyers who would migrate to smaller coastal locations for reasons such as downscaling or retirement, increasing numbers of young people are heading to the coastal locations as the work from home trend continues and the background noises of lawnmowers and hadadas' have become an acceptable feature of Zoom meetings.
Small town along the Mid-South and Hibiscus Coast such as Amanzimtoti, Pennington, Ramsgate and Margate are attracting attention, not just from upcountry buyers, but even those who work in Durban.
Downsizing trend expected to continue.
It is expected that the downsizing trend will continue for the foreseeable future; however there will also be a continued trend of people relocating and moving away from current 'expensive' areas to move to areas where you get more bang for your buck such as the Kwazulu-Natal Midlands or "Zoom Towns.".
Whilst this is 'downscaling' from a cost perspective, it is 'upscaling' from a quality-of-life perspective.
Listing Time
The listing time of a property refers to the number of days between the time that it is first listed as being for sale, and the time that an offer to purchase is accepted or the owner decides to take the property off the market again. That period tends to be shorter when there is high demand and lots of buyers keen to snap up any well-priced properties that become available - and longer when there is low demand and an oversupply of properties for sale relative to the number of potential buyers.
When the national average listing time gets longer, it is an indication that a 'buyers' market' is developing and that sellers may need to become increasingly accommodating about both price and terms in order get their properties sold.
So, what are the current listing times?
The latest statistics from First National Bank also shows that the national average listing time fell to 67 days in the fourth quarter of last year from 76 days in the third quarter. In addition, the figures show that the average differential between asking prices and actual selling prices has declined to 10% currently from 13% at the beginning of 2020, while the average home price increased by 2,1% last year.
The average days to sell has been steadily increasing quarter on quarter. Lockdown increased the average time it took to sell, as people could not go and view properties that were on the market in order to make offers to purchase.
This article includes excerpts from the following:
https://www.property24.com/articles/why-are-south-africans-selling-their-homes-right-now/30254
https://www.cbn.co.za/featured/where-are-south-africas-zoom-towns-and-why-are-buyers-moving-there/
Author: Admin