5 Factors to consider when buying or selling property in South Africa

Prospective homeowners considering a move in 2024 should contemplate the unique circumstances that differentiate this year from previous years. Therefore, a comprehensive understanding of the current landscape and its underlying dynamics is crucial. 

In this piece, we explore the impact of several compounding factors and offer advice for navigating the property market amidst economic pressures such as load shedding and elections.

1. Impact of interest rates on buyer-seller dynamics

Interest rates are crucial in shaping the property market's buyer-seller dynamics. Fluctuations in interest rates directly influence the affordability of mortgages, subsequently impacting buyers' purchasing power and sellers' bargaining leverage. 

As the South African Reserve Bank's Monetary Policy Committee deliberates and stagnates on repo rate adjustments, market players anticipate the potential implications on borrowing costs and overall market sentiment.

2. Market projections and expectations

FNB Economics indicated a stabilisation in interest rates, which should remain a factor for Q1 and 2 of 2024. This has turned out to be the case, and while stagnation is better than an increase, one has to admit that market sentiment remains dower.

However, prior rate hikes' lingering effects continue reverberating within the market, influencing consumer behaviour and investment decisions. Amidst a landscape marked by economic uncertainty and rising living costs, stakeholders in the real estate sector brace themselves for potential shifts in market dynamics.

3. Buyer's vs. seller's market - a brief overview

In a previous article, we discussed the shifting trends in key markets such as Midrand (read more here). To summarise, the property market presents a nuanced blend of buyer's and seller's market dynamics, varying across regions and property types. 

While conditions predominantly favour buyers, characterised by high stock and competitive pricing, pockets of seller's markets persist in prime locations and sought-after areas. These areas include parts of Gauteng, such as Midrand, and a sizeable chunk of the Western Cape.

Factors such as weak economic growth, high interest rates, and rising living expenses contribute to the prevailing buyer-centric environment, albeit with exceptions in specific localised markets.

4. Economic pressures - Load Shedding, Elections

Beyond market dynamics, economic pressures such as load shedding and impending elections complicate the real estate landscape. Load shedding disrupts business operations and undermines productivity, impacting overall economic growth and consumer confidence. 

Furthermore, the anticipation of national elections introduces uncertainties that permeate investor sentiment and consumer behaviour, necessitating vigilance and adaptability from market participants.

By understanding the intricacies of buyer-seller dynamics, leveraging tailored advice, and remaining resilient in the face of economic pressures, stakeholders can navigate the complexities of the real estate landscape with confidence and foresight.

5. Brief advice for buyers and sellers

The current market landscape offers buyers opportunities amidst challenges. With flat property prices over the past two years and accessible lending options, prudent buyers can capitalise on favourable conditions to secure value-driven investments. 

Conversely, sellers are advised to adopt a realistic approach to pricing, leveraging expert guidance to optimise sales outcomes in a competitive market environment. Strategic pricing aligned with market trends and property valuations facilitates successful transactions.

Contact LWP Properties 

Contact us at LWP Properties to explore our range of properties for sale, and let our experienced team assist you in finding your perfect match!

To connect with dependable and trustworthy real estate professionals renowned for their industry expertise, reach out to us below for additional information:

Telephone number: 011 468 5900
For enquiries -  https://www.lwp.co.za/contact/

Our address:
72 Kyalami Boulevard
Kyalami Business Park
Kyalami, 1684

LWP Properties holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority (PPRA).