After last month's bleak budget speech by Finance Minister Tito Mboweni, South Africans are settling in for a long and uncertain road to economic recovery. While the inevitable increase in pressure on consumers’ pockets will unavoidably filter down into the property market, experts remain cautiously optimistic about property’s performance.

The South African Reserve Bank (SARB) has for the second consecutive cycle kept the repurchase rate unchanged at 3.5% per annum.

Berry Everitt, CEO of the Chas Everitt International property group, says the most positive news to emerge from the Medium-Term Budget Policy Statement delivered by Finance Minister Tito Mboweni today is that the economy is expected to “rebound” in the final quarter of 2020, and return to positive growth next year of 3,3%, following an expected decline of 7,8% this year.

While the Home Buying Market is buoyant, still being driven by sharply lower interest rates this year.

The weeks that followed the hard lockdown at the end of March have been inconceivable for retailers.

In this last quarter concluding in December 2020, the residential property market continues to gain momentum, and in some areas appears to be substantially busier - even when compared to peaks in previous years, says Richard Day, CEO of fixed-fee agency, Eazi Real Estate.

The current, exceptionally low interest rates in South Africa have sparked off a sudden and unexpected call for residential property bonds.

The further reduction of the repo rate by 25 basis points to an all-time low of 3.5% takes the prime interest rate down to 7%, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

Initial predictions regarding the future of the residential property market as a result of the Covid-19 lockdown have painted a sombre picture: significant drops in house prices, more supply than demand, and people unable to afford their home loans. 

“The COVID-19 Crisis has changed the world a lot, perhaps less through introducing new trends and more through speeding up old trends,” said John Loos, FNB Economist at an FNB Commercial Property Finance (CPF) webinar earlier today.