So, what's next? Your property forecast for 2022
Category Property
Change is inevitable. We all know that. But while some change may be bittersweet, there's always a silver lining that accompanies it: the promise of new possibilities.
As we end off the year, it's time to look ahead at the change that 2022 may yet hold for the housing market.
Looking back
With the recent interest rate hike, a decrease in available properties on sale, higher selling prices, and the continued flexibility to work remotely, it is very likely that we may see the housing market level out in 2022 after the exponential growth it enjoyed over the past year.
The SA Reserve Bank (SARB) hiked up the repo rate by 25 basis points to 3.75% in November 2021, placing the prime lending rate at 7.25%. This is the first repo rate hike in nearly three years, increasing pressure on homeowners, but it would be premature to increase rates again in 2022.
Civil unrest in July, the pandemic we are still fighting through, the ongoing energy supply constraints - South Africa's economic outlook is not looking good at this moment. And all of this is negatively affecting investor confidence and job creation. At a time like this, the hike in the repo rate can easily be deemed premature, as inflation has remained flat for the past couple of months. To ensure the continued stability of the market, it is vital that the repo rate remains at low levels to support growth in the economy. Globally, central banks are supporting economic growth. Now, we can only hope that the SARB will do the same in 2022.
As more properties enter the market in these circumstances, prices will moderate marginally and the balance between sellers and buyers will normalise. The higher interest rates could also contribute to a drop in prospective new purchasers. If inflation does not abate, especially if there is another rate increase, it will take a toll on property affordability.
But even though sales may plateau somewhat, they will by no means turn down. The growth in property prices and trends like first-time homebuyers joining the property market will continue.
If the prime lending rate stays at the current level, and employers continue to offer the flexibility to work remotely, there will be continued demand for home buying. The ability to work from anywhere and being able to pursue a better work-life balance will allow for the trend of people opting to relocate their families out of cities to smaller towns to continue in 2022.
Looking forward
The thing to look forward to the most in 2022 may prove to be the trend of new property technology innovations that is sure to continue in 2022, and which may even pick up speed. Property tech has been transforming the industry over the past few years, with many processes aiming to become fully digital. Already we are seeing a mindset shift in the rental property industry, where individuals have gone from being rental agents to becoming rental asset managers. With software available from companies like WeconnectU, they are able to offer their clients value that was previously unattainable.
The trend of digital services will continue to grow and create efficiencies that allow property professionals to focus solely on the interpersonal aspect of the business. At Meridian Realty, we already utilise a customer relationship management (CRM) software system that helps to nurture relationships with potential buyers and sellers, connecting all data from sales leads and customers in one place.
In 2022, CRM systems will become a growing trend. Through the utilisation of contact information, purchase history, enquiries, sales opportunities, and marketing campaigns that are all managed digitally, CRMs will be able to create a more holistic environment where optimal growth becomes a greater possibility.
Another great technological leap seen during the pandemic has been that of virtual tours. Though in the coming year, convenience may become the primary perk instead of medical safety. And as more tech-savvy millennials become homebuyers, the trend of touring properties virtually, will just grow. Investment in high-quality photography, virtual tours, and short films of the neighbourhood that provide buyers with a true sense of where they will be living, will thus become vital to remain a relevant player in the real estate market.
A turning of the tide seems to be upon us, but we're looking forward to riding the wave into 2022, embracing every opportunity that arises.
We cannot wait to see what the year holds for you.
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This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Author: Meridian Realty
