Now that the lockdown has been lifted, it doesn’t necessarily mean that things will go back the way they used to be. As we enter a new phase (Alert Level 3) of the “new normal”, what does that look like for the Real Estate Industry?
According to our President Cyril Ramaphosa, we are opening our economy in phases. With that being said, here are the things the Real Estate Industry needs to keep an eye on.
Deeds Office Status
Deeds registration has been considered as an essential service which means they have been open, however Level 3 Regulations have been put in place as necessary health measures before services can resume. But here’s what you can expect so far.
Elderly people who are over 60 years old who are more vulnerable to the virus will be overly considered. And there will only be a skeleton staff who will be able to work in the Deeds Office.
In fact, the Deeds Office in Johannesburg has to close down again because a staff member appeared to have been affected with the virus, so apart from the essentials, property sales will definitely be stalled.
It’s official, estate agents can go back to work!
It has been a long, stressful wait but we made it! Estate agents can all now return to work. We have answered the most pressing questions that will no doubt pop up as soon as the relief has settled in.
Of course, while Real Estate agents can now go back to work, there are still some exceptions to consider. Most businesses may operate except for short term home sharing, letting and leasing for leisure purposes.
You are permitted to operate under Alert Level 3 following certain conditions:
You must strictly comply with health measures and physical distancing
Return to work will be phased-in so you can put in safety measures and have your workplace Covid-19 ready.
You may return to work to in a manner that also reduces risk of infection
Practical Solutions for Landlords
This can be quite tricky because the rules will be different depending on how severely affected one area is compared to the other. That means while there is a national regulation, it would still differ between each province, district and metro in the country.
Rental Market Recovery
It will still take awhile (maybe even 2 years) to recover for Real Estate to recover from the lockdown. Back in 2009 during recession, most of the tenants in good standing were not required to pay in full rent, so if history were to repeat itself, we might be expecting the same drop on rental payments for this year. In fact, we go in depth on this one on our LIVE Stream with Michelle Dickens. You can check it out here to find out more about it here
Can you evict a tenant from a property?
Yes. Order of eviction can now be executed. A competent court may grant an order of eviction Can a tenant move in or out of the premises?
Yes, you are now allowed to move to a new residence in which case you must be in possession of the affidavit referred to as Form 6 in the Regulations. The affidavit needs to be signed by a Justice of the Peace or Commissioner of Oaths.
Extended Buyer’s Market
Keep your eyes open guys, as we will be seeing well-priced properties in the market for 2020. It’s like Black Friday for Real Estate Investors! Now if you’re asking yourself whether you should buy or rent during these times, Botha said that right now, conditions are ripe for property investment.
Right now, banks are clamouring to grant bonds, even at 100%. This means it’s ideal for first time buyers who are looking for a fixed interest rate. And because price growth has been slow, most developers have become more competitive with their pricing.
Vacancies and Rentals
For vacancies and rentals, it may take awhile before you see the market bounce back. Before the lockdown 81.52% of tenants were in good standing but it dropped to 63.75% around May.
And as we are doing our research there are a total of 21 towns that managed to have a good standing ratio of above 80%.
Students will be able to go back to their residences and private student accommodations once the lockdown has been lowered to level 3 according to the minister of Higher Education Blade Nzimande.
As students return to their private residences and student accommodations, practicing physical distancing, controlling communal spaces and and special arrangements in dining halls will be a must.
“Students who live in private rented accommodation close to campuses may also return provided that physical distancing arrangements are in place.” he said.
Rise in Property Technology
There definitely has been a surge of technology in the real estate industry as people are trying to adapt to the new normal. With physical interaction being limited, more real estate agents are finding themselves relying on technology for them to conduct their business in the property sector. A survey in 2018 showed that 97% of the 270 respondents in 30 different countries believe digital innovations are influencing their business. In South Africa, you will see a rise of a digital- first approach to property.
There are 3 ways in which the digital technologies are affecting the property market. Data and Analytics
Because data is easily available now, real estate agents are able to capture and interpret data and make strategic decisions that can positively impact their business.