Johannesburg – As we reflect on the challenges of the past year, the geopolitical uncertainty brought on by Russia’s war with Ukraine has had a profound impact on economies worldwide. Locally, the South African Reserve Bank’s (Sarb) consecutive interest rate hikes, totaling 10 since November 2021 and reaching 8.25%, have put pressure on the real estate sector, resulting in decreased interest from potential property buyers.

Carl Coetzee, CEO of BetterBond, highlights that while the interest rate hikes have affected affordability and emphasized the importance of prudent budgeting, the residential property market has once again demonstrated resilience. Buyer activity remains robust in certain price segments and property sectors, as evident in BetterBond’s steady registration volumes above pre-2020 levels.

Coetzee points out that BetterBond’s bond approval ratios have increased by 2.01% in November compared to the same month last year, with first-time buyers experiencing a 1.44% improvement in approval rates.

Despite the challenges, Coetzee remains cautiously optimistic about the property market’s future. Looking ahead to 2023, he identifies key trends that are likely to shape the housing market:

  1. Semigration and Reverse Semigration: Coetzee predicts that semigration, the movement of people to new cities or provinces, will gain momentum. Buyers aged 46 and above, who have the means to relocate, are showing significant interest in moving, particularly to the Western Cape. Furthermore, buyers in the 36 to 49 age group are also opting for lifestyle changes by moving to different locations, with an intriguing return of buyers to parts of Gauteng, especially in the upper end of the market.
  2. Silver Semigration: The trend of older buyers, “silver-semigration,” relocating to smaller towns along the Garden Route, Whale Coast, and Cape Winelands will continue. While downsizing is a common choice, these buyers may opt for more valuable properties.
  3. Sectional Titles Remain Popular: Sectional title properties continue to be in demand, accounting for a significant portion of the market’s stock value. First-time buyers are particularly attracted to new developments featuring sectional title properties.
  4. Emphasis on Green and Automation: Sustainable living is gaining momentum, and buyers seek homes that offer convenience, sanctuary, and sustainability. The rise in load shedding and electricity costs has fueled interest in alternative energy options such as solar energy and boreholes.
  5. High Demand for Estate Living: Estate living remains sought after, especially among buyers with families, as security and access to amenities within a controlled environment become increasingly important.
  6. Micro-Living and Urban Minimalism: Micro-living options, offering urban homeowners a minimalist lifestyle, are gaining popularity. Micro unit developments, often mixed-use, are designed to provide easy access to amenities within the building.
  7. Multi-Generational Living: Multi-generational living is becoming more common as extended families seek to pool their resources to cope with rising living costs. Homes with extra space for a granny flat or cottage are highly desired.
  8. Fintech’s Impact: Digital innovation, particularly in the form of ‘proptech,’ will play a significant role in the real estate industry in 2023. Online platforms and tools are expected to continue revolutionizing how companies manage, buy, and sell properties.

Despite the challenges faced in 2022, there are hopeful signs for the future. The economy has shown unexpected growth in the third quarter, and the Reserve Bank’s actions to address inflationary pressures may lead to a stabilization and potential decrease in interest rates by the end of 2023.