Navigating the real estate market in 2021
Many industries are piecing things back together again this year, as they try to recover from the effects of the pandemic or recreate themselves to remain relevant in a changing world. One industry that has been left unaffected to a great extent, and yet has had to re-create itself almost entirely in the same breath, is the real estate industry. As 2021 sets off, it’s important to understand just how the industry will shift gears in the months to come. The biggest factor that will influence the industry is the fact that the public is in need of more guidance and advice than before. The uncertainty that still surrounds the economic landscape and the future of the world as it battles COVID-19 means that people are more cautious when it comes making real estate and investment choices. The role of property practitioners is thus more vital than ever in supporting the public through this period of recovery. Property practitioners have a tough task ahead of them as they provide the public with confidence in their decisions, while also helping grow the market again so that that confidence is not misplaced. A vital part of this process, beyond the elbow grease and hard work that is already going into recuperating the industry, is the building of strong relationships with clients. Property practitioners may have acted as a “middle man” of sorts in many instances in the past, but their roles are being redefined as they provide more and more tailored services to those who are navigating the real estate landscape. With the past year obliging so many industries to re-evaluate their way of doing business, the real estate industry has also sought out more streamlined solutions that put less strain on property practitioners while offering the public more efficient service. A big role player in this process is the adoption of Customer Relationship Management systems that allow property practitioners to enhance the way they interact with both existing and prospective clientele. This is especially of use when it comes to the rental market, where a rotating roster of clients needs to be connected with. As a result of the continuing uncertainty and the weakness of the economy, the rental market is proving to be one of the most greatly affected. Where tenants are able to, 2021 will most likely find them choosing to continue renting where they currently are, opting for safety above prospects. Unfortunately, vacant rental properties could remain vacant for quite some time still as a result. This may be even more true for properties at the lower end of the price spectrum, as lower-income individuals have been some of the worst affected by the lockdown and TERS relief coming to an end. As more and more tenants conduct research regarding their financial futures, many may also realise their rental amounts are almost the same as bond repayments would be, leading them to reconsider the possibility of becoming homeowners and bringing stability to their lives amid the storm. As more South Africans re-evaluate their futures, with considerations such as work-from-home options becoming more prevalent, many people are looking for homes that will better suit their changed lives, and renting may simply no longer be the answer to those plans. All of this cements the necessity for property practitioners’ role in the months to come. If it is time for you to alter your real estate situation, enlist the guidance and advice of a trusted property practitioner to help you navigate whatever comes next. 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Thinking of buying instead of renting?
The property market has been labelled a buyer’s market for most of 2020. Even though this year has proven to be disastrous in many respects, many factors have been beneficial for property buyers. From the historically low interest rates and the adjustment of the property transfer threshold, to lowered property prices, the market opened its doors to buyers (at least figuratively speaking for most of the year due to lockdown regulations). But the simple truth is that buying property isn’t necessarily the right choice for everyone, even when they can afford it. Finding out which is best for you is the key. Renting property The most obvious reason for choosing to continue renting property is finances. Buying a home requires access to funds in order to qualify for a home loan, and a commitment to a continued expense over many years, as you pay off your home loan. Choosing to rent will also allow you to lower your debt-to-income ratio which will ensure that you have more lending options open to you in the future. However, once you can afford to buy a house, it may still not be the most beneficial option for you. The questions you need to ask yourself once you have the finances to back a property purchase become vastly more introspective. When the question is no longer “Can you?”, but rather “Should you?”, you are required to consider how buying a house will affect you… for the rest of your life. Not a simple task, we know. So, start with two simple questions. The first question is: “Am I ready to take full responsibility for the property (including all the maintenance expenses)?” Homeowners do not have the luxury of calling a landlord when something breaks or leaks or blows away in a gust of wind. Owning a property is a full-time investment that will require you to care for your home consistently, throughout the year, and not just when something goes wrong. The second question is: “Am I ready to settle down in one place for the foreseeable future?” If you are still adventurous at heart and unsure of where you want your life to go, buying a house may inhibit your options and make you regret one of the biggest decisions of your life. This may introduce buyer’s remorse into your life at a time when our economy really does not allow such an unaffordable luxury. Renting a home may be a safer option when you are still looking for adventure, allowing you to alter the course of your life reasonably easily. Ownership The biggest benefit of owning your own home is the fact that you are paying for something that will belong to you in the end, not simply paying for the privilege of having a place to stay in, with nothing to show for it in the end. Paying off a home loan means you are ensuring that you won’t have to pay for habitation throughout your whole life, meaning rental expenses will someday cease to be a part of your monthly expenses. This, in turn, will allow you the opportunity to save money and increase your wealth in the future. Once you begin thinking about buying a property, it is also important to remember the aforementioned fact: The real estate market in currently swinging in your favour. Property prices can be unpredictable and you may never again get an opportunity such as this. So once you know you are ready for the responsibility and know you want to settle down, don’t let grass grow under your feet, unless its growing on the lawn that belongs to you. 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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)