Prices could drop by as much as 30% in some segments of the market. But, in addition to price, buyers must consider factors such type, demographic, location and the local economy.
Smee says the decline in house prices will be affected by critical factors such as the length of the lockdown, the extent to which industries are limited in their operations and the relief provided.
“We anticipate that the higher end of the market will drop by 20% to 30% for several reasons, including affordability, demand and a lack of foreign buyers.
“Properties in the mid-price range of R1.5 million to R3m should see a decrease of 15% to 20%.” A decline of 5% to 10% is expected in the affordable housing market.
“Broadly speaking, the economy, buyers’ affordability and the supply will ultimately lead us into an extended buyer’s market.” Historically low interest rates, which are expected to remain “for some time”, will allow potential buyers previously unable to enter the market to do so now, says David Sedgwick, managing director of Horizon Capital.
“Property is a long-term investment and this is true now more than ever. It remains a good investment and an important part of any well diversified portfolio.”
Buyers should secure prime investment properties in the best locations possible.
“These are the important differentiators that will drive the capital growth of one’s investment as we head back towards normality.”
In the short term, however, Sedgwick advises investors to avoid buying into developments with a speculative intention, hoping to flip the property for a profit on completion.
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